Equalization of Chain Store Competition

March 22, 1938

Report Outline
Independent Retailers Vs. Chain Stores
Status of Chain Stores in National Economy
Special Chain Stores Taxes in the States
Effects of Restrictive Legislation

Independent Retailers Vs. Chain Stores

Their business menaced by the rapid growth of the J. chain-store method of distribution during the post-war years, small business men and independent retailers banded together about a decade ago to improve their competitive position through legislation directed against the chains. The initial campaign of the independents was designed to curb the expansion of chain systems by subjecting them to special taxation in the states. The first chain-store tax laws were adopted in 1927; such laws are now on the statute books in 23 states.

A drive for enactment of state laws to legalize resale price maintenance, intended to curtail advantages derived largely by the chains from price-cutting practices, was undertaken early in the depression, but was temporarily abandoned after establishment of the N. R. A. Since the drive was resumed in 1935, all except six states have enacted price-maintenance legislation, while a number have banned selling below cost.

During the last two years, independents have won the support of the federal government in their attack upon chain stores. Following a “march on Washington” by about 1,000 small merchants in 1936, Congress approved the Robinson-Patman anti-price discrimination law, intended to limit the buying advantages enjoyed by chain systems and other large-scale distributors. Similar laws were subsequently enacted in several of the states. Last year, state resale price maintenance legislation was strengthened by passage in Congress of the Tydings-Miller rider, which exempts price maintenance agreements from the operation of federal anti-trust laws.

ISSUE TRACKER for Related Reports
Chain Stores
Feb. 10, 2023  The Changing Retail Landscape
Jun. 08, 2018  Retailing Shakeout
Sep. 10, 2004  Big-Box Stores
Mar. 22, 1938  Equalization of Chain Store Competition
Aug. 28, 1934  Taxation of Chain Stores
Apr. 24, 1930  The Chain Store Problem in 1930
May 21, 1928  Development of Chain Store Merchandising
Commercial Law
Retail Trade
State and Local Taxes