James Stewart did not receive an Oscar nomination for portraying Alfred Kralik in The Shop Around the Corner.
James Stewart's Oscar win must be noted as a bit of a head scratcher, as his win for The Philadelphia Story is perhaps most notable because it gave Stewart his only competitive Oscar. It always feels a bit of a shame as for me personally it is his only Oscar nominated performance that I don't either really quite like or flat out love. Insult is added to injury is when one realizes that it was not even Stewart's best work from 1940. Stewart here once again plays a romantic lead, although this time this time it more closely focuses on his character unlike The Philadelphia Story where one could possibly argue that both he and Cary Grant were supporting Katherine Hepburn the whole time. Stewart's given a far more substantial role here as a salesman at a leather goods shop. Stewart naturally makes Alfred extremely likable with his easy going charm that is not more fitting for the director, Ernst Lubitsch's fairly, although not quite entirely, breezy tone that he establishes for the lighthearted story. Stewart could not feel more effortless in the role and is an extremely easy lead to follow through this romantic comedy.
Actually one of the things I did not care for in his performance in The Philadelphia Story was that I felt Stewart actually made his character's disgust and boredom at his task of covering socialites a little too realistic to the point that he was a bit too off putting for it to be fun. Stewart actually directly fixes that mistake with this performance as he must conveying a similair sentiment in his earliest scenes with his eventual love interest, Klara Novak, played by Margaret Sullavan. The early set up is that she's the new employee at the shop whose particular method of selling items quickly gets on Alfred's nerves. Stewart now this time strikes exactly the right tone in portraying this. He certainly gets across just how much Klara gets under his skin in his fairly intense reactions, but Stewart accentuates them in the right fashion in which they become appropriately comic without being too ridiculous. Stewart while driving the humor from it properly he also makes the initial conflict between the two characters actually feel wholly honest rather than simply just the superfluous and rather thin barrier to be broken down throughout the story.
What's worth nothing on Stewart's work though is that he never treats any element of the film just a means to get to the eventual happy end of the film. Stewart does not allow any part of it just to be taken for granted, and succeeds in realizing any aspect of Alfred's life not simply making him feel stuck in the romantic comedy structure. One of the subplots is dealing with the high strung nature of his boss Mr. Matuschek (Frank Morgan) which causes some minor problems earl yon but these problems grow as Matuschek becomes concerned about more pivotal things in his life. This inadvertently effects Alfred early on though eventually it becomes directly problematic for him. Stewart is very good in portraying Alfred's rightful frustrations at the behavior, and is quite moving when portraying the severe disappointment when it appears that Mr. Matuschek's paranoia has gotten the best of him causing him to fire Alfred. Stewart, as per usual, makes this feel so honest that he makes it incredibly easy to sympathize with Alfred's plight during these scenes. Things switch around soon enough though when, through very problematic circumstances, Mr. Matuschek comes back to his senses.
Stewart is great in the scene where Alfred takes on the actual source of Mr. Matuschek's misery, bring that classic Stewart passion into Alfred's disgust which makes the moment rather powerful. The film after all is a romantic comedy though so an essential element of it is the relationship. In this case they are quite dismissive of one another, even though they unknowingly write love letters to one another. What works so well is that Stewart and Sullavan do not depict is that immediate switch from hatred to love. Simply in their scenes together, where they are not necessarily interacting all that much, Stewart and Sullavan slowly depict just a gradual distinguishing of hostilities. There are occasional fall backs to some more aggressive behavior but both actors make this feel particularly natural. The two of them earn the eventual heartwarming sweetness that comes from the ending, since neither of them make it easy by having either the love or the fights seem forced in the least. It's lovely work from the both them. For Stewart this is a great example of just what made him so appealing as a leading man, and if he had to win leading actor for 1940 it should have been for this performance.