In Budapest, Hungary, the Matuschek and Company store is owned by Mr. Hugo Matuschek and the bachelor Alfred Kralik is his best and most experienced salesman. When Klara Novak seeks a job position of saleswoman in the store, Matuschek hires her but Kralik and she do not get along. Meanwhile the lonely and dedicated Kralik has an unknown pen pal that he intends to propose very soon; however, he is fired without explanation by Matuschek on the night that he is going to meet his secret love. He goes to the bar where they have scheduled their meeting with his colleague Pirovitch and he surprisingly finds that Klara is his correspondent; however, ashamed After being let go he does not disclose his identity to her. When Matuschek discovers that he had misjudged Kralik and committed a mistake, he hires him again for the position of manager. But Klara is still fascinated with her correspondent and does not pay much attention to Alfred. Alfred works out a plan to reveal himself to Klara's who he is attracted to now that he sees past her attitude.

Production Budget Analysis

What was the production budget for The Shop Around the Corner?

Directed by Ernst Lubitsch, with Margaret Sullavan, James Stewart, Frank Morgan leading the cast, The Shop Around the Corner was produced by Metro-Goldwyn-Mayer with a confirmed budget of $500,000, placing it in the ultra-low-budget category for comedy films.

At $500,000, The Shop Around the Corner was produced on a lean budget. Lower-budget films benefit from reduced break-even thresholds, with profitability achievable at approximately $1,250,000.

Budget Comparison — Similar Productions

• The Red Shoes (1948): Budget $500,000 | Gross $10,000,000 → ROI: 1900% • undertone (2026): Budget $500,000 | Gross $19,535,928 → ROI: 3807% • Winnie-the-Pooh: Blood and Honey 2 (2024): Budget $500,000 | Gross $7,582,541 → ROI: 1417% • Leatherface (2017): Budget $500,000 | Gross $1,476,843 → ROI: 195% • The Beguiled (1971): Budget $475,000 | Gross $1,100,000 → ROI: 132%

Key Budget Allocation Categories

▸ Talent Salaries & Producing Deals Established comedic talent can command $15–20 million per film, with top-tier stars earning even more through producing credits and backend deals. Comedy ensembles multiply this cost across several well-known performers.

▸ Production & Location Filming While comedies generally avoid the VFX costs of action films, location shooting in recognizable cities or exotic locales adds meaningful production expense.

▸ Marketing & P&A (Prints & Advertising) Comedies rely heavily on marketing to build opening-weekend momentum. Studios typically spend 50–100% of the production budget on marketing, with comedy trailers and social media campaigns being particularly expensive.

Key Production Personnel

CAST: Margaret Sullavan, James Stewart, Frank Morgan, Joseph Schildkraut, Sara Haden Key roles: Margaret Sullavan as Klara Novak; James Stewart as Alfred Kralik; Frank Morgan as Hugo Matuschek; Joseph Schildkraut as Ferencz Vadas

DIRECTOR: Ernst Lubitsch CINEMATOGRAPHY: William H. Daniels MUSIC: Werner R. Heymann EDITING: Gene Ruggiero PRODUCTION: Metro-Goldwyn-Mayer FILMED IN: United States of America

Box Office Performance

Theatrical box office data is not publicly available for The Shop Around the Corner (1940). This may indicate a limited release, direct-to-streaming, or a release predating modern box office tracking.

Profitability Assessment

Insufficient publicly available data to assess profitability.

INDUSTRY IMPACT

PRODUCTION NOTES

▸ Development

Ernst Lubitsch purchased the rights to Miklós László's play Parfumerie in 1938. According to Variety, Lubitsch initially planned to create a film adaptation of the play working with Myron Selznick. Before he joined MGM, the studio had purchased the rights to the film from him for $62,500. MGM wanted him to produce and direct Ninotchka, to which he agreed on the condition that he also produce and direct The Shop Around the Corner. The studio agreed on the condition that Ninotchka be produced first and assigned a low production budget to The Shop Around the Corner, which meant that the film's screenwriter Samson Raphaelson received a lower salary than usual. In an interview Raphaelson commented that the story was substantially dialogue-based but felt that it did not threaten the film's overall quality. He also claimed that, while the film was based on the play, it was vastly different. In his own words, Lubitsch felt that none of his preceding films had "atmosphere and...characters [that] were truer than in this picture".

▸ Casting

Dolly Haas, Margaret Tallichet and Janet Gaynor were each at one point attached to the film before Margaret Sullavan was cast in the lead role alongside James Stewart; neither was available at the time that production was originally set to begin, so Lubitsch decided to postpone the start date. In total, filming took about a month. The final cost was $474,000.