department store

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store, commonly a shop or other establishment for the retail sale of commodities, but also a place where wholesale supplies are kept, exhibited, or sold. Retailing—the sale of merchandise to the consumer—is one of the oldest businesses in the world and was practiced in prehistoric times.

Total retail sales, including motor vehicles but excluding e-commerce and catalog sales, topped $4.5 trillion in the United States in 2018. Currently, there are more than 1 million retail establishments employing some 29 million people. Most are small; about 60% have fewer than 10 employees. Larger stores, with over $500,000 in annual sales, account for more than two thirds of all retail sales. The 50 largest retailers account for more than a third of all sales, and stores with 100 or more branches account for 97% of all department store sales, 70% of all drugstore sales, 71% of all shoe sales, and 76% of all grocery store sales.

The Development of Retail Stores

The earliest form of retail merchandising was probably the exchange of food and weapons; later came traders and peddlers, and by 3000 B.C. shops had become common. During the Greek and Roman period, stores, including many specialty shops, developed in the form of open booths, attracting large cosmopolitan crowds. After the decline of the Roman Empire, barter became more important, but by the 14th cent. retail trade again assumed importance. Merchants, who in early times were viewed with suspicion, rose in the social scale. Small stores, each carrying its special line of goods, reached their peak in the 18th cent. The wholesale business developed, and traveling salesmen and standard prices came into general use.

In the United States the general store preceded the single-line store and is still common in small rural communities. In the late 19th cent. the department store came into being—a large-scale general store or a combination of single-line stores in which each line of merchandise is operated as a separate department. Such stores provide the convenience of easy accessibility to a large variety of goods. Modern department stores have been vital to the development of shopping centers and malls, huge retail developments that contain a wide variety of stores and services.

Retail concerns that do business principally through the mail are called mail-order houses. In the United States among the first and largest were Montgomery Ward (founded 1872) and Sears, Roebuck, & Company (founded 1886), which sold their goods to rural residents by means of annual catalogs. Both later developed warehouses and retail stores in many urban communities; Montgomery Ward closed in 2001, and Sears was merged with Kmart to become a subsidiary of the Sears Holdings Corporation in 2005. Many mail-order houses now also depend on orders placed over the telephone and via the Internet. Development of the World Wide Web on the Internet has given rise to companies, such as Amazon.com, that sell goods exclusively through an Internet site, or on-line “store,” shipping purchases by mail or other carriers.

Chain stores, though known in earlier times, first developed their modern form in 1859, when the Great Atlantic and Pacific Tea Company (A&P) standardized the quality and price of all merchandise sold in its stores. Through central management, quantity purchasing, standardization of business methods, and limited individual service, the chains are often able to sell their goods well below prices charged by independent stores. Chain stores were once typified by five-and-ten-cent stores (e.g., F. W. Woolworth Company, which operated such stores until 1998), but the most common forms now are discount superstores (e.g., Wal-Mart; see Walton, Sam), bakeries, tobacco stores, drugstores, groceries, and department stores.

Consumers' cooperative stores (see cooperative movement) have been established in Europe and the United States. Discounting merchandise became widespread after World War II, and stores specializing in discounted merchandise have become the fastest growing segment of the retail industry. The discount, or warehouse, club, where shoppers must pay a fee to become members and name-brand products are sold at a discount (often packaged in multiples or very large containers), became popular in the 1990s. Since the late 1990s, e-commerce conducted by computer or smartphone has become an increasing competitor to retail stores of all sorts, accounting for more than 8% of all retail sales.

Bibliography

See G. M. Lebhar, Chain Stores in America, 1859–1959 (3d ed. 1963); R. Hendrickson The Grand Emporiums (1979); D. Bellenger and J. I. Goldstucker, Retailing Basics (1983); M. Levinson, The Great A&P (2011).

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The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Department Store

 

(in Russian, univermag), a large store that sells practically all types of merchandise, often including edible goods. Department stores first appeared in the mid-1800’s in France and subsequently spread to other countries. By the early 20th century, when capitalism had reached the monopolistic stage of development with the increased concentration and centralization of commercial capital, many department stores were brought together as part of various commercial monopolies.

In Russia the first department stores were built in the early 20th century. The largest were the Muir and Merrilees (Miur i Meriliz) department store in Moscow (now the Central Univermag) and the department stores of the Guard Officers’ Economic Association in St. Petersburg (now the Leningrad House of Trade) and of the Officers’ Economic Association in Moscow (now the Central Univermag of the voentorg, or military exchange system). The first Soviet department store was Moscow’s State Department Store (the GUM), opened in 1921. On Jan. 1, 1941, the USSR had 44 large department stores; by Jan. 1, 1975, it had 580 large and medium-sized ones. Department stores are classified according to the nature of their operations: they may be citywide stores—that is, serving the population of an entire city, as well as a sizable number of out-of-town customers—or they may be designed to serve one or more districts within one city.

Department stores represent the most progressive type of store for merchandising nonfood products. The availability of a wide range of goods enables the customer to purchase all needed merchandise in one building, thus simplifying and shortening the shopping process. Department stores often provide a wide variety of supplementary customer services—for example, home delivery of merchandise, information services, wrapping stations, storage facilities for customers’ purchases, special rooms for mothers and children, savings banks, and communication services. Department stores use such modern merchandising methods as self-service (with goods arranged in categories for the customer’s convenience), open-shelf merchandising, and ordering from samples.

The department store’s great number of employees and large scale of operations (receiving, storage, preparation for sale, and in-store movement of goods) facilitate a more far-reaching division of labor than is practical in other types of stores. Such division of labor results in increased efficiency among store workers and permits the utilization of mechanized equipment—for example, conveyors, elevators, loaders, and calculators. Large department stores practice modern management methods, making use of electronic computers.

As compared with other types of stores, department stores have higher profit capacity and lower operating costs per thousand rubles of merchandise turnover, including operating costs for building maintenance. Construction costs for a department store are 10 to 15 percent less than for several small stores accounting for the same total sales area. As a rule, department stores are located in separate buildings or are part of urban shopping centers.

REFERENCES

Organizatsiia torgovli promyshlennymi tovarami, 2nd ed. Moscow, 1971.
Kotov, V. N. Monopolisticheskie formy khoziaistvennykh otnoshenii. Moscow, 1971. Chapter 5, subsec. 2.
Kochurov, A. M. Universal’nye magaziny. Moscow, 1972.
Gogol’, B. I. Ekonomika sovetskoi torgovli, 3rded. Moscow, 1971.

A. M. KOCHUROV

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.

department store

a large shop divided into departments selling a great many kinds of goods
Collins Discovery Encyclopedia, 1st edition © HarperCollins Publishers 2005
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