The Shop Around the Corner: The life-affirming 1940 film that deserves to be a festive classic

As the star of It's a Wonderful Life, Jimmy Stewart will always be associated with the Christmas movie genre. Nearly 80 years after it was originally released, the 1946 supernatural fantasy about Stewart's George Bailey being saved from his suicidal thoughts on Christmas Eve by his guardian angel Clarence Odbody (Henry Travers) is still and probably forever shall be a festive staple for movie fans.

But if you've watched It's a Wonderful Life umpteen times and would like a different classic Christmas movie to enjoy, there's actually another starring Stewart that's perfectly suited to fill its cinematic shoes.

Ernst Lubitsch's 1940 romantic-comedy The Shop Around the Corner sees Stewart play Alfred Kralik, the top salesman at the Budapest leather goods store Matuschek and Company. After immediately falling out with new employee Klara Novak (Margaret Sullavan), their relationship deteriorates even further as they're forced to work alongside each other.

What the pair don't know is that they are actually pen pals, and over the course of the endless stream of letters that they've sent to each other, they have fallen in love. Primarily set in the weeks leading up to Christmas, The Shop Around the Corner is about as elegant as classic Hollywood movies get. "It's a very charming movie. There's a lot of comedy. It's very simple," says Jacqueline Lynch, the author of Christmas in Classic Films. "But it's not entirely cheery all the way through."

Much like It's a Wonderful Life, The Shop Around the Corner is laced with a darkness and cynicism, with a story that features meanness, pettiness and miscommunication, that makes it all the more gripping. "Both films go to dark places and then end on bursts of joy that wouldn't be possible if they hadn't gone to the dark places," explains Jeremy Arnold, a film historian and author who wrote Christmas in The Movies: 35 Classics to Celebrate the Season.

In The Shop Around the Corner, the store's owner Hugo Matuschek (Frank Morgan) hires a private detective because he's certain that one of his employees is having an affair with his unseen wife. Matuschek takes out his frustrations on all of his employees, without ever revealing the real reason why. In the film's most dramatic scene, Matuschek even tries to shoot himself.

At the same time, Klara and Alfred's attacks on each other get increasingly pointed, too. She calls him "a little insignificant clerk", while at one point she retorts: "I really wouldn't care to scratch your surface, Mr Kralik, because I know exactly what I'd find. Instead of a heart, a handbag. Instead of a soul, a suitcase. And instead of an intellect, a cigarette lighter... which doesn't work."

A darker side to the holidays

The Shop Around the Corner's mixing of comedy, romance, tragedy, and the macabre is particularly heightened because of the film's proximity to Christmas. Each of the characters' vulnerabilities, insecurities and hopes are exposed against the festive fun they're supposed to be experiencing.

"This is one of my favourite subjects at Christmas time," says Arnold. "No matter what our attitude is to Christmas, we all have a love-hate relationship with it. It can inspire great highs, joy, love, togetherness. It can heighten feelings of loneliness, emptiness, wistfulness, alienation, cynicism. Sometimes, we can go through variations of these emotions on a daily basis when it gets closer to Christmas."

Of course, The Shop Around the Corner is far from the first story or film to have used the Christmas period to transform a negative and unhappy individual into a more compassionate and empathetic version of themselves – I'm looking at you, Ebenezer Scrooge. But Lubitsch makes it all the more potent by how he balances the joy and desperation of his characters, all while using the season and festive imagery to progress them and push the story along.

"Lubitsch fills the frame more and more with holiday visuals and decor – Christmas trees, ornaments, presents, snow, things that we associate with Christmas – as the story gets closer to Christmas," says Arnold. "As the movie moves ahead, it matches how the Stewart and Sullivan characters slowly but steadily get to their happy ending. It's almost as if Christmas time is a catalyst to help turn that hate into love, which is really what the journey is for them."

As one of the most celebrated directors in Hollywood history, Lubitsch found subtle and surprising ways to increase the drama as The Shop Around the Corner gets closer and closer to Christmas. "Lubitsch was a master at letting the audience figure things out visually," explains Arnold.

Lubitsch has a sophisticated style – he makes the audience participate in the storytelling, in the humour and the gags – Jeremy Arnold

The director of Ninotchka, To Be or Not to Be, and Heaven Can Wait was renowned for finding graceful and creative ways to convey plot, motivation and characterisation in a manner that made viewers even more invested in the film. The phrase "The Lubitsch Touch" was invented to describe his filmmaking class. As inspiration, legendary writer and director Billy Wilder even had a sign on his wall that asked, "What would Lubitsch have done?"

"Lubitsch has a sophisticated style," explains Arnold. "He makes the audience participate in the storytelling, in the humour and the gags. You really have to pay attention when you watch a Lubitsch film, because, if you look away from the screen, you're gonna miss a joke or something really important visually that will pay off."

He used this inventiveness as payoffs to jokes, to create chemistry and tension between Kralik and Novak, and to suddenly unveil pathos and pearls of wisdom. Although The Shop Around the Corner is officially set in Budapest, Lubitsch's approach means that the film has a universality that makes it feels as though it could be unfolding anywhere in the world. And while the supporting cast mostly have European accents, the two leads have American accents.

"I think there's a fairy-tale aspect to it," says Lynch. "Even though it is set in Hungary, we have these American accents. Jimmy Stewart isn't thought of as European in any sense. But he blends perfectly with the other characters. There's a European colourfulness to the supporting cast. Lubitsch brought a European shrug of the shoulders to his stories."

The German-born filmmaker was attracted to adapt Miklós László's 1937 Hungarian play Parfumerie because his father had run a similar shop in Berlin when Lubitsch was growing up. "This was a perfect vehicle for him to recreate his own memories of the experience of the shop. How all the employees quarrel and bicker. That all came from his childhood, his father and the store," says Arnold. "I imagine Lubitsch didn't want to set it in America so he could bring a European flavour to the story and the characters."

The Shop Around the Corner proved to be so popular with audiences and Hollywood alike that just nine years after it was released, it was remade as the Judy Garland musical In the Good Old Summertime – and most recently it inspired You've Got Mail. The 1998 romcom starring Meg Ryan and Tom Hanks sees the business rivals falling in love over email rather than letters, and is set entirely in New York.

While undeniably entertaining, You've Got Mail fails to plummet into the desperation of its characters like its predecessor, and even Hanks and Ryan can't quite generate Stewart and Sullavan's spark. "It just doesn't measure up to The Shop Around the Corner. It has an appealing cast. The story is really amusing. We love Hanks and Ryan. But there's an adult sophistication that is inherent to Lubitsch that is really not quite there," believes Arnold.

For Lynch, The Shop Around the Corner and other Christmas movies of that era "seem to have a lot more depth than modern movies", which are instead "very superficial". She adds, "They're all about, 'We've got to have the best Christmas ever. It has to be perfect.' Back in the day, they weren't worried about that. They were just coming off the [Great] Depression. You were lucky if you had a meal."

You get your family where you can find it and you get Christmas where you can find it, too – Jacqueline Lynch

While she's the first to admit that there are certainly commercialised aspects to The Shop Around the Corner – particularly when it comes to the lead characters selling as many products as possible and spending an evening decorating the store – she points to one of the final scenes, where Matuschek and new employee Rudy (Charles Smith) go for dinner because everyone else is busy, as the true message of the film.

"It's about a group of workers in a small store that are like a family. This is Matuschek's family. He's the father figure to them. You get your family where you can find it and you get Christmas where you can find it, too. Sometimes, Christmas doesn't just happen. You have to make it."

Ultimately, The Shop Around the Corner remains a perfect Christmas watch because of how it blends the complicated feelings that come with the holidays in a candid, unpatronising, and deeply human fashion, while still remaining hopeful. "It just deals with the holidays in a very interesting, compelling and human way," insists Lynch. "It leaves you with a warm and hopeful feeling of Christmas."

-bbc