Green’s Dictionary of Slang

(US und.) a fake ‘shop’ used for elaborate swindles of naive customers.

1841		Sun. Flash (NY) 19 Sept. n.p.: Those villainous, swindling concerns called ‘Grinding Shops’.
1841		Flash (NY) 3 Oct. n.p.: [He] was stopped by one of the Jews at the door of a grinding shop [...] ‘Here ish de plaish to py de pest vatches and all sorts of jewlry’.