A History of the Discount Store

Discount stores like Target, Wal-Mart, and those few K-Mart stores that are still around have their genesis in the Civil War. No, not because they treat their employees like slaves—well, maybe in Wal-Mart’s case, yes—but because the Civil War and its aftermath created a revolution of sorts in the process of mass production and distribution. Indeed, it was during this heady time following the War of Northern Aggression that mass merchandising as practiced today really began. For the next fifty years or so mass merchandising was done primarily through a general type of department store that I like to call the general store. Eventually some of the more successful general store operators began to branch out and created what became known as the chain store.

The Great Depression affected mass merchandising just as it did every other aspect of American life. Most people in the 1930’s had a hard time; although there were conspicuous exceptions like the Kennedy and Bush families. Because there wasn’t a lot of disposable income—or any other kind of income for that matter—the Great Depression saw the rise of what would be known as the discount store. One offshoot that typically isn’t considered by most contemporary shoppers to have an affiliation with discount stores like K-Mart or Target was the rise of the grocery supermarket. Until this time, most people didn’t go to one store to buy food. They bought vegetables from a greengrocer and meat from a butcher. The grocery store changed all that, allowing people to get everything they need for breakfast, lunch and dinner in one convenient place.

Because it had the benefit of being big and costing little, grocery stores could offer discounts on many products: it was far cheaper to buy meat from a grocery store than a butcher and it didn’t take long before non-food items began appearing in these stores. While we take for granted the idea of bringing home a bag with meat, veggies, bread as well as medicine, Band-Aids and salves this was a tremendous sea change in the 30’s. No longer did a day out shopping literally mean spending all day going from the greengrocer to the butcher to drug store. And who knew how far apart those stores were spaced. The discount grocery had it all and was just down the road.

World War II saw the next major revolution in discount shopping with what were actually called discount houses. These stores provided remarkably heavy discounts on major appliances as well as other little goodies like radios or cameras and soon even televisions. The discount came as a result of the store purchasing directly from the manufacture of the goods as well as low inventory cost. In addition, many of these discount houses were found not in singular structures, but as part of an office building shared with other tenants, many of whom were the store’s best customers.

Once the dreaded Huns and Japs had been roundly defeated, the discount store as we know it today really kicked off. It was all a matter of supply and demand. Returning soldiers were ready to go back to work, get their wives pregnant and start having kids. They didn’t have a lot of money, but there were so many of them that retailers made up for lost profit margins on individual items by selling in high volume. The discount stores idea skyrocketed, with K-Mart leading the way. That is, until a fellow name Sam Walton looked at how K-Mart was conducting business and decided he could improve upon it.