Charles Harrod was born in Lexdon in Essex in 1799. As a young man he worked as a miller in Clacton but in 1834 he moved to London where he began selling groceries in Stepney. In the 1840s he rented a small shop in Brompton Road, Knightsbridge. The shop sold groceries and only had a turnover of £20 a week.

In preparation for the Great Exhibition in Hyde Park in 1851, new buildings were erected along the Cromwell Road and South Kensington. Knightsbridge now changed from a working-class slum area into one of the most fashionable parts of London.

In 1860 Charles sold the business to his son, Charles Digby Harrod. The trade at Harrods continued to grow and by 1868 the shop had sixteen staff and a turnover had risen to £1,000 per week. Harrod concentrated on encouraging wealthy people to his store and provided a personalised service for important customers. He also managed to increase trade by introducing his own brand groceries patriotically packaged in the colours of the Union Jack.

After a fire in December 1883, Harrod's shop was destroyed by fire. This gave Harrod the opportunity to design and rebuild a new store. The new Harrods had five floors and a grand central staircase. When Charles Digby Harrod retired in 1889 the business was sold as a limited company for £120,000.