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A chain store or retail chain is a
retail Retail is the sale of goods and Service (economics), services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturing, manufacturers, dire ...
outlet in which several locations share a
brand A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many parts of the world. A
franchise Franchise may refer to: Business and law * Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees * Franchise, a privilege to operate a type of business such as a cable television p ...
retail establishment is one form of chain store. In 2005, the world's largest retail chain,
Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...
, became the world's largest corporation based on gross sales.


History

In 1792, Henry Walton Smith and his wife Anna established W.H. Smith as a news vending business in
London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
that would become a national concern in the mid-19th century under the management of their grandson William Henry Smith. The world's oldest national retail chain, the firm took advantage of the railway boom during the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
by opening news-stands at
railway stations A train station, railway station, railroad station or depot is a railway facility where trains stop to load or unload passengers, freight or both. It generally consists of at least one platform, one track and a station building providing such ...
beginning in 1848. The firm, now called WHSmith, had more than 1,400 locations as of 2017. In the U.S., chain stores likely began with J. Stiner & Company, which operated several tea shops in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
around 1860. By 1900,
George Huntington Hartford George Huntington Hartford (September 5, 1833 – August 29, 1917) headed the Great Atlantic and Pacific Tea Company (A&P) from 1878 to 1917. During this period, A&P created the concept of the chain grocery store and expanded into the country's ...
had built
The Great Atlantic & Pacific Tea Company The Great Atlantic & Pacific Tea Company, better known as A&P, was an American chain of grocery stores that operated from 1859 to 2015. From 1915 through 1975, A&P was the largest grocery retailer in the United States (and, until 1965, the lar ...
, originally a tea distributor based in New York, into a grocery chain that operated almost 200 stores. Dozens of other grocery, drug, tobacco, and variety stores opened additional locations, around the same time, so that retail chains were common in the United States by 1910. Several state legislatures considered measures to restrict the growth of chains, and in 1914 concern about chain stores as a factor in passage of the Federal Trade Commission Act and the Clayton Antitrust Act. Isidore, Benjamin and Modeste Dewachter originated the idea of the chain department store in Belgium in 1868, Le Pantheon de L'Industrie, Paris, 1891, Page 20 ten years before A&P began offering more than coffee and tea. They started with four locations for ''Maisons Dewachter'' (Houses of Dewachter):
La Louvière La Louvière (; wa, El Lovire) is a city and municipality of Wallonia located in the province of Hainaut, Belgium. The municipality consists of the following districts: Boussoit, Haine-Saint-Paul, Haine-Saint-Pierre, Houdeng-Aimeries, Houde ...
,
Mons Mons (; German and nl, Bergen, ; Walloon and pcd, Mont) is a city and municipality of Wallonia, and the capital of the province of Hainaut, Belgium. Mons was made into a fortified city by Count Baldwin IV of Hainaut in the 12th century. T ...
,
Namur Namur (; ; nl, Namen ; wa, Nameur) is a city and municipality in Wallonia, Belgium. It is both the capital of the province of Namur and of Wallonia, hosting the Parliament of Wallonia, the Government of Wallonia and its administration. Na ...
and Leuze. They later incorporated as ''Dewachter frères'' (Dewachter Brothers) on January 1, 1875.Annexes to the Belgian Monitor of 1875. Acts, Extracts of Acts, Minutes and Documents relating to Corporations, Book #3, Page 67 The brothers offered
ready-to-wear Ready-to-wear (or ''prêt-à-porter''; abbreviated RTW; "off-the-rack" or "off-the-peg" in casual use) is the term for ready-made garments, sold in finished condition in standardized sizes, as distinct from made-to-measure or bespoke clothing ...
clothing for men and children and specialty clothing such as riding apparel and beachwear. Isidore owned 51% of the company, while his brothers split the remaining 49%. Under Isidore's (and later his son Louis') leadership, ''Maisons Dewachter'' would become one of the most recognized names in Belgium and France with stores in 20 cities and towns. Some cities had multiple stores, such as
Bordeaux, France Bordeaux ( , ; Gascon oc, Bordèu ; eu, Bordele; it, Bordò; es, Burdeos) is a port city on the river Garonne in the Gironde department, Southwestern France. It is the capital of the Nouvelle-Aquitaine region, as well as the prefecture ...
. Louis Dewachter also became an internationally known landscape artist, painting under the pseudonym
Louis Dewis Louis Dewis (1872–1946) was the pseudonym of Belgian Post-Impressionist painter Louis DeWachter, who was also an innovative and highly successful businessman. He helped organize and managed the first department store chain. Early life He was b ...
. By the early 1920s, chain retailing was well established in the United States, with A&P,
Woolworth's Woolworth, Woolworth's, or Woolworths may refer to: Businesses * F. W. Woolworth Company, the original US-based chain of "five and dime" (5¢ and 10¢) stores * Woolworths Group (United Kingdom), former operator of the Woolworths chain of shop ...
, American Stores, and
United Cigar Stores United Cigar Stores was a chain of cigar stores in the United States that in its first quarter-century grew to nearly 3,000 shops. It eventually became part of the corporation that bought Marvel Comics and its parent company Magazine Managemen ...
being the largest. By the 1930s, chain stores had come of age, and stopped increasing their total market share. Court decisions against the chains' price-cutting appeared as early as 1906, and laws against chain stores began in the 1920s, along with legal countermeasures by chain-store groups. State taxes on chain stores were upheld by the U.S. Supreme Court in 1931. Between then and 1933, 525 chain-store tax bills were introduced in state legislatures, and by the end of 1933 special taxes on retail chains were in force in 17 states.


Characteristics

A chain store is characterised by the ownership or franchise relationship between the local business or outlet and a controlling business.


Difference between a "chain" and formula retail

While chains are typically "formula retail", a chain refers to ownership or franchise, whereas "formula retail" or "formula business" refers to the characteristics of the business. There is considerable overlap because key characteristic of a formula retail business is that it is controlled as a part of a business relationship, and is generally part of a chain. Nevertheless, most codified municipal regulation relies on definitions of formula retail (e.g., formula restaurants),Town of Jaffrey Planning Board Proposed Zoning Changes Summary
, Public Hearing January 22, 2018, Town of Jaffrey, New Hampshire (.pdf)
Permit how-to guides - chain stores (formula retail use)
, Planning Dept., City and Cty. of San Francisco
in part because a restriction directed to "chains" may be deemed an impermissible restriction on
interstate commerce The Commerce Clause describes an enumerated power listed in the United States Constitution ( Article I, Section 8, Clause 3). The clause states that the United States Congress shall have power "to regulate Commerce with foreign Nations, and amo ...
(in the US), or as exceeding municipal zoning authority (i.e., regulating "who owns it" rather than the characteristics of the business).The Park at Cross Creek v. City of Malibu
Calif. Ct. App., 2nd. Dist. Filed 21-Jun-2017 (.pdf)

, ''The Malibu Times'' 1-Nov-2017
Non-codified restrictions will sometimes target "chains". A municipal ordinance may seek to prohibit "formula businesses" in order to maintain the character of a community and support local businesses that serve the surrounding neighborhood.


Decline

Brick-and-mortar chain stores have been in decline as retail has shifted to
online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of t ...
, leading to historically high retail vacancy rates. The hundred-year-old
Radio Shack RadioShack, formerly RadioShack Corporation, is an American retailer founded in 1921. At its peak in 1999, RadioShack operated over 8,000 worldwide stores named RadioShack or Tandy Electronics in the United States, Mexico, United Kingdom, Austra ...
chain went from 7,400 stores in 2001 to 400 stores in 2018. FYE is the last remaining music chain store in the United States and has shrunk from over 1000 at its height to 270 locations in 2018. In 2019,
Payless ShoeSource Payless (formerly known as Payless ShoeSource Inc.) is an international discount footwear chain. Established in 1956 by cousins Louis and Shaol Pozez, Payless was a privately held company owned by Blum Capital, and Golden Gate Capital. In 1961, ...
stated that it would be closing all remaining 2,100 stores in the US.


Restaurant chains

A restaurant chain is a set of related
restaurant A restaurant is a business that prepares and serves food and drinks to customers. Meals are generally served and eaten on the premises, but many restaurants also offer take-out and food delivery services. Restaurants vary greatly in appearan ...
s in many different locations that are either under shared corporate ownership (e.g.,
McDonald's McDonald's Corporation is an American multinational fast food chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hambur ...
in the U.S.) or
franchising Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses some or all of its know-how, procedures, intellectual property, use of its busine ...
agreements. Typically, the restaurants within a chain are built to a standard format through architectural prototype development and offer a standard menu and/or services.
Fast food restaurant A fast-food restaurant, also known as a quick-service restaurant (QSR) within the industry, is a specific type of restaurant that serves fast-food cuisine and has minimal table service. The food served in fast-food restaurants is typically ...
s are the most common, but sit-down restaurant chains also exist. In 1896, Samuel Isaacs from
Whitechapel Whitechapel is a district in East London and the future administrative centre of the London Borough of Tower Hamlets. It is a part of the East End of London, east of Charing Cross. Part of the historic county of Middlesex, the area formed ...
, east London opened the first
fish and chips Fish and chips is a popular hot dish consisting of fried fish in crispy batter, served with chips. The dish originated in England, where these two components had been introduced from separate immigrant cultures; it is not known who created ...
restaurant (as opposed to a take-away) in London, and its popularity saw a rapid expansion of the chain with further restaurants around London and outside including
Brighton Brighton () is a seaside resort and one of the two main areas of the City of Brighton and Hove in the county of East Sussex, England. It is located south of London. Archaeological evidence of settlement in the area dates back to the Bronze A ...
,
Ramsgate Ramsgate is a seaside town in the district of Thanet in east Kent, England. It was one of the great English seaside towns of the 19th century. In 2001 it had a population of about 40,000. In 2011, according to the Census, there was a populati ...
,
Margate Margate is a seaside town on the north coast of Kent in south-east England. The town is estimated to be 1.5 miles long, north-east of Canterbury and includes Cliftonville, Garlinge, Palm Bay and Westbrook. The town has been a significan ...
and other seaside resorts in southern England. In 1864, the
Aerated Bread Company The Aerated Bread Company Ltd (A.B.C.) was a British company founded and headquartered in London. Although it is often remembered as running a large chain of tea rooms in Britain and other parts of the world, it was originally established in 1 ...
(ABC) began operating a chain of teashops in Britain. ABC would be overtaken as the leader in the field by
Lyons Lyon,, ; Occitan: ''Lion'', hist. ''Lionés'' also spelled in English as Lyons, is the third-largest city and second-largest metropolitan area of France. It is located at the confluence of the rivers Rhône and Saône, to the northwest of t ...
, co-founded by
Joseph Lyons Joseph Aloysius Lyons (15 September 1879 – 7 April 1939) was an Australian politician who served as the 10th Prime Minister of Australia, in office from 1932 until his death in 1939. He began his career in the Australian Labor Party (ALP), ...
in 1884. From 1909 Lyons began operating a chain of teashops which became a staple of the
High Street High Street is a common street name for the primary business street of a city, town, or village, especially in the United Kingdom and Commonwealth. It implies that it is the focal point for business, especially shopping. It is also a metonym fo ...
in the UK, and at its peak, the firm numbered around 200 cafes. Restaurant chains are often found near
highway A highway is any public or private road or other public way on land. It is used for major roads, but also includes other public roads and public tracks. In some areas of the United States, it is used as an equivalent term to controlled-access ...
s,
shopping mall A shopping mall (or simply mall) is a North American term for a large indoor shopping center, usually Anchor tenant, anchored by department stores. The term "mall" originally meant pedestrian zone, a pedestrian promenade with shops along it (that ...
s and densely populated urban or tourist areas.


Opposition

The displacement of
independent business A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...
es by chains has sparked increased collaboration among independent businesses and communities to prevent chain proliferation. These efforts include community-based organizing through
Independent Business Alliance The American Independent Business Alliance (AMIBA) is a non-profit organization that represents the interests of local independent businesses, helps communities develop strong local economies through nurturing local entrepreneurs, and promotes citi ...
s (in the U.S. and Canada) and "buy local" campaigns. In the U.S.,
trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exc ...
organizations such as the
American Booksellers Association The American Booksellers Association (ABA) is a non-profit trade association founded in 1900 that promotes independent bookstores in the United States. ABA's core members are key participants in their communities' local economy and culture, and to ...
and American Specialty Toy Retailers do national promotion and advocacy.
NGOs A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...
like the
New Rules Project New is an adjective referring to something recently made, discovered, or created. New or NEW may refer to: Music * New, singer of K-pop group The Boyz Albums and EPs * ''New'' (album), by Paul McCartney, 2013 * ''New'' (EP), by Regurgitator, ...
and
New Economics Foundation The New Economics Foundation (NEF) is a British think-tank that promotes "social, economic and environmental justice". NEF was founded in 1986 by the leaders of The Other Economic Summit (TOES) with the aim of working for a "new model of wealth ...
provide research and tools for pro-independent business education and policy while the
American Independent Business Alliance The American Independent Business Alliance (AMIBA) is a non-profit organization that represents the interests of local independent businesses, helps communities develop strong local economies through nurturing local entrepreneurs, and promotes citi ...
provides direct assistance for community-level organizing.


Regulation and exclusion

A variety of towns and cities in the United States whose residents wish to retain their distinctive character—such as
San Francisco San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17t ...
;
Provincetown, Massachusetts Provincetown is a New England town located at the extreme tip of Cape Cod in Barnstable County, Massachusetts, in the United States. A small coastal resort town with a year-round population of 3,664 as of the 2020 United States Census, Province ...
and other
Cape Cod Cape Cod is a peninsula extending into the Atlantic Ocean from the southeastern corner of mainland Massachusetts, in the northeastern United States. Its historic, maritime character and ample beaches attract heavy tourism during the summer mont ...
villages;
Bristol, RI Bristol is a town in Bristol County, Rhode Island, US as well as the historic county seat. The town is built on the traditional territories of the Pokanoket Wampanoag. It is a deep water seaport named after Bristol, England. The population of B ...
;
McCall, Idaho McCall is a resort town on the western edge of Valley County, Idaho, United States. Named after its founder, Tom McCall, it is situated on the southern shore of Payette Lake, near the center of the Payette National Forest. The population was 2,991 ...
;
Port Townsend, Washington Port Townsend is a city on the Quimper Peninsula in Jefferson County, Washington, United States. The population was 10,148 at the 2020 United States Census. It is the county seat and only incorporated city of Jefferson County. In addition t ...
;
Ogunquit, Maine Ogunquit ( ) is a resort town in York County, Maine. As of the 2020 census, its population was 1,577. Ogunquit is part of the Portland– South Portland–Biddeford, Maine Metropolitan Statistical Area. History Ogunquit, which means "be ...
;
Windermere, Florida Windermere is a town in Orange County, Florida, United States. As of the 2020 census, the town population was 3,030. It is part of the Orlando Metropolitan Statistical Area. History A Post Office opened at Windermere in 1888. The Post Office ...
and
Carmel-by-the-Sea, California Carmel-by-the-Sea (), often simply called Carmel, is a city in Monterey County, California, United States, founded in 1902 and incorporated on October 31, 1916. Situated on the Monterey Peninsula, Carmel is known for its natural scenery and r ...
—closely regulate, even exclude, chain stores. They don't exclude the chain itself, only the standardized formula the chain uses, described as "''formula businesses''".Analysis of Cities with Formula Business Ordinances
, Malibu, California (.pdf)
For example, there could often be a restaurant owned by
McDonald's McDonald's Corporation is an American multinational fast food chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hambur ...
that sells hamburgers, but not the formula franchise operation with the golden arches and standardized menu, uniforms, and procedures. The reason these towns regulate chain stores is aesthetics and tourism. Proponents of formula restaurants and formula retail allege the restrictions are used to protect independent businesses from competition."Cape Cod Residents Keep the Chain Stores Out"
article by Beth Greenfield June 8, 2010


See also

*
Formula restaurant A formula restaurant is a type of formula retail business. It is characterized as a restaurant regulated by contractual or other arrangements to standardize menus, ingredients, food preparation, interior and exterior design and/or uniforms. The te ...
*
List of bookstore chains This is a list of bookstore chains with brick-and-mortar locations. In the United Kingdom and many parts of the English speaking world, they are known as "Bookshops" and "newsagents". In American English, they are called "bookstores", or sometime ...
*
List of Canadian clothing store chains This list of Canadian clothing store chains encompasses some, but not all, of the retailers located in Canada. List * Addition Elle *Les Ailes de la Mode * Arc'teryx *Ardene *Aritzia * Beyond the Rack * Bluenotes * Boutique La Vie en Rose * Bro ...
*
List of clothing and footwear shops in the United Kingdom This is a list of the current and defunct physical clothing and footwear shops in the United Kingdom. This includes shoes, clothing and sportswear, but not online retailers. __FORCETOC__ Current A–D E–H I–M N–P Q–S T� ...
*
List of restaurant chains The following is a list of restaurant chains. International Argentina *California Burrito Co. * Mostaza Australia Canada Costa Rica * Rostipollos Denmark * Jensen's Bøfhus Egypt * Cook Door * Mo'men Finland * Hesburger * Kotipizza ...
*
List of supermarket chains As of September 2020, this is a list of supermarket chains, past and present, which operate or have branches in more than one country, whether under the parent corporation's name or another name. For supermarkets that are only in one country, see ...


References


Further reading

* Carroll, Glenn R., and Magnus Thor Torfason. "Restaurant Organizational Forms and Community in the US in 2005." ''City & Community'' 10#1 (2011): 1–24. * Ingram, Paul, and
Hayagreeva Rao Hayagreeva "Huggy" Rao (born 27 April 1959) is an American academic. He is the Atholl McBean Professor of Organizational Behavior and Human Resources at the Stanford Graduate School of Business. Early life Rao was born in India. Rao graduated ...
. "Store Wars: The Enactment and Repeal of Anti‐Chain‐Store Legislation in America." ''American Journal of Sociology'' 110#2 (2004): 446–487. * Lebhar, Godfrey Montague, and W. C. Shaw. ''Chain stores in America, 1859-1962'' (Chain Store Publishing Corporation, 1963). * Levinson, Marc. "The Great A&P and the Struggle for Small Business in America" (2019). . * Matsunaga, Louella. ;;The changing face of Japanese retail: Working in a chain store'' (Routledge, 2012). * Newman, Benjamin J., and John V. Kane. "Backlash against the 'Big Box', Local Small Business and Public Opinion toward Business Corporations." ''Public Opinion Quarterly'' 78#4 (2014): 984-1002. * Phillips, Charles F. "The Chain Store in the United States and Canada," ''American Economic Review'' 27#1 (1937), pp. 87–9
in JSTOR
* Schragger, Richard. "The Anti-Chain Store Movement, Localist Ideology, and the Remnants of the Progressive Constitution, 1920-1940." ''Iowa Law Review'' 90 (2005): 1011+. * Scroop, Daniel. "The anti-chain store movement and the politics of consumption." ''American Quarterly'' 60#4 (2008): 925–949. * Winship, Janice. "Culture of restraint: the British chain store 1920–39." ''Commercial Cultures: Economies, Practices, Spaces'' 31 (2000).


External links

* {{Authority control Retail formats Retail processes and techniques Business terms Franchises