Directed by
Ernst Lubitsch
Made by
Metro-Goldwyn-Mayer (MGM)
Discover the intricate plot of The Shop Around the Corner (1940). From unexpected twists to emotional highs and lows, this detailed summary breaks down every moment to give you a deeper understanding of the film’s story.
In the bustling gift store of Matuschek’s, located in the charming city of Budapest, Alfred Kralik (James Stewart) finds himself navigating the complexities of both work and an unexpected romance. His world is further complicated by the arrival of Klara Novak (Margaret Sullavan), a new employee who seems to bring constant irritation and conflict to his daily routine. Despite their apparent animosity, both Alfred and Klara share a delightful secret: they have been exchanging heartfelt and introspective letters with anonymous pen pals, each dreaming of the day they’d finally meet the compassionate souls behind the written words.
As the Christmas season approaches, the gift store becomes increasingly busy with customers, adding to the tension in the air. Alfred, who has long enjoyed a good rapport with the store’s owner, Mr. Matuschek (Frank Morgan), begins to sense a shift in his boss’s demeanor. Distraught, Matuschek drops a bombshell on Alfred, suggesting it is in everyone’s best interest if he resigns. Stunned by this unexpected twist of fate, Alfred bids farewell to his colleagues, including Klara, marking the first time they engage in a civil conversation amidst their usual banter.
That same night, a long-anticipated rendezvous for the secret pen pals is set to take place. Initially reluctant to attend due to his recent job loss, Alfred’s curiosity gets the better of him, compelling him to sneak into the restaurant where Klara awaits, adorned with a red carnation — a symbol they had previously agreed upon. Just as he approaches her table, the emotional weight of their situation overwhelms him, causing him to hesitate and withhold the truth of why he’s there. Instead, he departs quietly, feeling a mix of bitterness and compassion for Klara, who remains oblivious to his presence and waits in vain for a pen pal who will never appear.
Meanwhile, back at Matuschek’s store, the plot thickens as Mr. Matuschek confides in a private detective regarding his suspicions about an affair involving one of his employees. The detective unveils a shocking truth: it is not Alfred, his trusted aide, who is betraying him, but another employee altogether. This revelation plunges Matuschek into despair, leading to a tragic attempt on his own life, which is thwarted by the quick actions of a delivery boy who arrives just in time to intervene. Heartbreak and shame consume Matuschek, necessitating his hospitalization.
The following day brings unexpected developments as Alfred makes a visit to Matuschek’s hospital room. There, he experiences a wave of forgiveness and reclaiming of his position — this time as the store’s manager. Meanwhile, Klara’s heart is heavy after the disappointment of her mysterious correspondent’s absence, and upon learning of Alfred’s new position, she struggles to accept the reality of her situation. Klara (Margaret Sullavan) fainting in Alfred’s office is just the beginning of a chain of misunderstandings that culminate in an unexpected reunion.
Back at home, as Klara recovers, Alfred pays her a visit and learns more about her pen pal, who explains the reason for his absence: seeing Klara with Alfred was too painful. Klara, relieved at the miscommunication, assures Alfred she will be back to work soon, sparking hope in him to finally reveal his true identity to her.
As Christmas Eve descends upon the vibrant store, both Alfred and Klara are caught up in the hustle of the day, while Mr. Matuschek, showing signs of recovery, is delighted to witness the store’s best sales performance in over a decade. Joyous celebrations ensue as bonuses are distributed, and while Klara prepares for yet another date with her enigmatic correspondent, Alfred seizes the moment. Teasingly, he inquires about the identity of her pen pal, even humorously confessing that this mystery man is, in fact, an unemployed, older, overweight man willing to ride on Klara’s coattails.
At a pivotal moment, Alfred garners the courage to reveal himself to Klara, pinning a red carnation to his lapel, symbolizing their shared connection. In that magical instant, misunderstandings unravel, hearts align, and the depth of their emotions comes to light, as everything that once seemed confusing and unclear finally becomes crystal clear to her. The true power of love and connection is revealed in this beautiful narrative, as two seemingly mismatched souls find solace, understanding, and hope in each other.
Track the key events of The Shop Around the Corner (1940) with a comprehensive timeline. Perfect for understanding the sequence of major plot points, this feature offers clarity on how the story unfolds.
Alfred and Klara's Initial Encounter
Alfred Kralik and Klara Novak begin working together at Matuschek's gift store in Budapest. Their daily interactions are filled with irritation, but unbeknownst to them, they each have a secret pen pal, exchanging heartfelt letters and longing for a personal connection.
Busy Christmas Season
As Christmas approaches, the store becomes increasingly busy, heightening the tension between Alfred and Klara. Meanwhile, their secret correspondence continues, deepening their unknown connection while they fight with each other at work.
Alfred's Dismissal
Alfred's long-standing relationship with Mr. Matuschek takes a turn when he is unexpectedly fired. Stunned by the sudden change in his circumstances, Alfred says his goodbyes, and for the first time, has a civil interaction with Klara.
The Meeting of Pen Pals
Despite his recent job loss, Alfred decides to attend the meeting that he and Klara had arranged as their pen pals. Peering through the restaurant window, he sees Klara waiting with the book and a red carnation, realizing that he misjudged her all along.
Matuschek's Heartbreak
Back at the store, Mr. Matuschek is devastated after learning from a private detective that his wife has been unfaithful. Believing Alfred to be the betrayer, he is heartbroken and contemplates suicide, only to be stopped by a young delivery boy.
Alfred's Visit to Matuschek
The following day, Alfred visits Mr. Matuschek in the hospital, where they share an emotional moment. Matuschek seeks Alfred's forgiveness and reinstates him at the store, promoting him to manager as a sign of trust.
Klara's Heartbreak
Klara arrives at work still reeling from the disappointment of her failed meeting with her pen pal. Upon discovering Alfred is now the manager, she faints in shock, overwhelmed by the series of unexpected events.
Clarifying Misunderstandings
While resting at home, Klara receives another letter from her pen pal explaining his absence at the meeting due to misinterpreting her association with Alfred. Relieved, she promises Alfred that she'll return to work the next day.
Christmas Eve Preparations
On Christmas Eve, the store buzzes with activity as everyone prepares for the holiday rush. Mr. Matuschek, nearly fully recovered, visits and is delighted to hear the store had its best sales day since 1928, rewarding everyone with bonuses.
A Change of Plans
As Klara is about to leave for another meeting with her pen pal, Alfred delays her with questions about the mysterious man. He also humorously mentions the pen pal's poor qualities, trying to make her see that he is the better choice.
Alfred's Revelation
In a moment of clarity, Alfred places a red carnation in his lapel, revealing his true feelings and identity as Klara's pen pal. This surprise revelation clears up the misunderstandings that plagued their interactions and sets the stage for romance.
Meet the characters that bring The Shop Around the Corner (1940) to life. Dive into detailed profiles of the cast and their roles, exploring their motivations, relationships, and arcs within the story.
Alfred Kralik (James Stewart)
Alfred Kralik is a thoughtful yet initially irritable employee at Matuschek's gift store. His character undergoes significant development as he grapples with his feelings for Klara, blending the dynamics of romance and workplace tension. His complex emotions and introspections reveal a sensitive man yearning for true connection.
Klara Novak (Margaret Sullavan)
Klara Novak is the new hire at Matuschek's, characterized by her spirited demeanor and secret vulnerability. Although she often clashes with Alfred, her depth unfolds through her romantic correspondence. Klara's journey reflects her hopes and heartbreaks, culminating in a poignant realization of true love.
Mr. Matuschek (Frank Morgan)
Mr. Matuschek is the kind-hearted owner of the gift store who faces personal turmoil throughout the film. His evolving relationships with his employees and struggles with trust add depth to his character, highlighting themes of betrayal and ultimately reconciliation. Matuschek’s journey reflects the challenges of leadership and human emotions.
Uncover the settings of The Shop Around the Corner (1940), from iconic locations to the time period that shapes its world. See how these elements add depth and context to the movie’s narrative.
Time period
1920s
The movie takes place in the 1920s, a time characterized by post-World War I recovery and the rise of consumerism. It was an era of significant social change and economic growth, which is mirrored in the busy atmosphere of Matuschek's gift store as Christmas approaches.
Location
Budapest
Budapest, the capital of Hungary, is a city known for its stunning architecture, rich history, and vibrant cultural scene. The film is set in a gift store located in this bustling city, where the lives of the main characters intertwine amidst the backdrop of a busy holiday shopping season.
Explore the core themes of The Shop Around the Corner (1940). From its commentary on social issues to its emotional undertones, delve into the deeper messages woven into the film’s story.
💌
Love Letters
The theme of romantic correspondence plays a central role in the movie, driving the relationship between Alfred and Klara. Their exchanges with their secret pen pal reveal their true feelings and desires, despite their outward irritation with each other. The hidden depths of their characters are explored through the letters, emphasizing the connection between written words and genuine emotions.
🎄
Christmas Spirit
Set during the Christmas season, the film captures the warmth and challenges of holiday preparations. The themes of forgiveness, new beginnings, and the joy of giving are highlighted as the characters navigate their misunderstandings and ultimately find connection with one another. Christmas serves as a backdrop that elevates the emotional stakes and resolutions.
What's After the Movie?
Not sure whether to stay after the credits? Find out!
Check out our other apps:
Actors
Companies
Latest Movies
© 2025 What's After the Movie. All rights reserved.