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Sales and Advertising Expenditure for Interwar American Department Stores

Published online by Cambridge University Press:  02 March 2011

Peter M. Scott  and
James Walker
Peter M. Scott*
Affiliation:
Professor of International Business History, University of Reading Business School, P.O. Box 218, Whiteknights, Reading, Berkshire RG6 6AA, United Kingdom. E-mail: p.m.scott@henley.reading.ac.uk.
James Walker*
Affiliation:
Lecturer, Henley Business School, University of Reading Business School, P.O. Box 218, Whiteknights, Reading, Berkshire RG6 6AA, United Kingdom. E-mail: j.t.walker@henley.reading.ac.uk..
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Abstract

Department stores represented one of the most advertising-intensive sectors of American interwar retailing. Yet it has been argued that a competitive spiral of high advertising spending, to match the challenge of other local department stores, contributed to an inflation of operating costs that eroded long-term competitiveness. We test these claims, using both qualitative archival data and establishment-level national data sets. The quantitative analysis confirms that the relationship between advertising expenditure and sales deteriorated markedly over the period, but indicates that the growing negative impact of retaliatory advertising by rival department stores was less important than contemporaries perceived.

Type
ARTICLES
Information
The Journal of Economic History , Volume 71 , Issue 1 , March 2011 , pp. 40 - 69
Copyright
Copyright © The Economic History Association 2011

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