Business and Industry

Who Mourns for J.J. Newberry's?

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Interesting piece from American Heritage on the 10-year anniversary of F.W. Woolworth's going out of business:

Fundamentally, the rise of chain stores like Woolworth took place in cities. On the eve of the Civil War, less than 20 percent of Americans qualified as "urban," a category that then included all persons living in towns with a population of at least 2,500. By 1920 more than half of all Americans lived in towns or cities, and the number of people living in cities of at least 8,000 had jumped from 6.2 million to 54.3 million. In this new environment, Woolworth became an anchor of the downtown business district.

It didn't happen overnight, though. As late as 1930, working-class city dwellers still did most of their shopping at corner groceries and mom-and-pop stores, where they often were allowed generous credit. A survey in 1926 revealed that chains accounted for 53 percent of grocery stores in the upscale Oak Park suburb of Chicago but just one percent of stores in the working-class towns of Joliet and Gary. The Depression changed all that, as mom-and-pops found it harder to extend credit and customers found the lower prices at chains like Woolworth impossible to resist. A survey in 1939 showed that 91 percent of lower-income shoppers were now paying cash for their purchases, having evidently abandoned the old neighborhood store for the cheaper, cash-only chains. Woolworth was a prime beneficiary.

Woolworth's closed up shop for good in 1997, but lives on through related franchises such as Foot Locker and Champ Sports.

More here (in a magazine that is itself going out of business).

Answer to titular question here.

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  1. “The Walmart of it’s day”.

    Nice reminder to some people (mostly lefty statists) not to waste their energy attacking Walmart, McDonald’s, Microsoft, etc (“those damned corporatey . . uh . . corporations!”). The market will bring themselves down.

    And in the meantime, these corporate watchdogs will tend to conveniently ignore their once darling companies started to drift south. (cough “Google”, “Apple”)

  2. Who Mourns for J.J. Newberry’s?

    Adonis?

  3. So it couldn’t compete with new outlets designed for the shopping centers and malls, like Kmart, Target and Wal-Mart, all three of which came into being in 1962 and offered more household goods at bargain prices.

    It’s worth noting that Kmart was established by Kresges another five-and-dime store with mostly urban locations and that Wolworth’s itself tried the same model with Woolco stores.

    Woolworth’s closed the Woolcos down in the US in the early eighties before Walmart was an established national chain.

    On the other hand Kresges closed it’s urban stores and kept the Kmart brand going even after it was on the ropes in the late 90s.

    Finkelstein is absolutely correct. In a hundred years people will be saying “Walmart was the _____ of its day”.

  4. All kidding aside, A&P must be stopped.

  5. “Nice reminder to some people (mostly lefty statists) not to waste their energy attacking Walmart,”

    Uh, somebody didn’t read the article. It said that Woolworth’s put the mom and pop stores out of business. That’s reason #1 to attack Walmart, in my non-lefty, non-statist book. Your “corporatey corporations” comment shows that you only have an argument against one group of granola crunching idiots. What you fail to realize is that Walmart is subsidized by federal, state and local governments in ways that no mom and pop business can compete with. Corporate welfare exists, but I guess you can just go on thinking only far left whiners are skeptical of corporate power these days. It makes for a much easier analysis.

  6. The birth of chains has a direct correlation with the dates of significant changes in federal monetary policy. Sears began its expansion around the time the Federal Reserve System was started, Woolworth and Kresge began their expansions when the gold standard was removed, Wal-Mart and others began when the siver standard was removed. The historic lows in the fed interest rate helped fuel further chainification for companies that had good credit – like Walgreens; companies that had large debt loads already – like Sears – could not take advantage.

  7. and what about WT Grant? Those guys had the coolest hot dog buns at their lunch counter.

    As an aside, Mrs TWC is an education babe so sometimes when we’re on vacation we visit charter schools and such.

    While we were in Hilo a few years ago we checked in on a charter school that was located in a former SS Kresge store downtown (still had the neon sign up).

    The coolest thing about it was that the entire stainless steel snack bar/lunch counter/restaurant area was INTACT. It was like walking through a shimmering time warp to 1958 except the school was using it as their cafeteria.

  8. When is American Heritage going out of business?
    Thanks.

  9. “The historic lows in the fed interest rate helped fuel further chainification”

    Don’t forget Jet Blue. They started with a buncha cash, new planes and, more importantly, new maintenance contracts. Now they’re just the same old crap, but all the other airlines had to crapify themselves to compete. Not surprising nobody gets anywhere on-time. Same thing with Woolworths, Walmart, etc.: everything gets crappier.

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