Is the Office Depot and OfficeMax merger a sign of the end?
What does an office supply store have that you can’t find anywhere else?
It might be a trick question. Amazon.com, Target, Costco and Walmart carry pretty much anything you’d want from an office store, plus plenty of other things besides. But it’s a question companies like Staples, Office Depot and OfficeMax need to find an answer to — or at least those first two do, since OfficeMax probably won’t exist much longer.
“Dramatic market changes are the main reason federal antitrust regulators are expected to approve the proposed merger of Office Depot and OfficeMax, the industry’s second- and third-largest competitors, respectively, without requiring divestitures,” Bloomberg Businessweek says.
Even combined, the two will still have less net income and sales than Staples, Businessweek says. When the merger was proposed in February, Bloomberg wrote that Office Depot and OfficeMax have combined revenue of “$18 billion, compared with Staples’ more than $24 billion in sales last year.” It also said the merged company “may accelerate the closing or selling of hundreds of stores” to cut costs.
Staples, trying to stay ahead of the competition online and in-store, this month announced a price match guarantee that kicks in Nov. 3. Under the new policy, Staples says it will “price match items sold and shipped by Amazon.com or any retailer who sells products in both retail stores and online under the same brand.”
Office supply stores are being squeezed by those bigger-box competitors on one side — Costco’s annual revenue has grown from $17 billion in 1997 to $105 billion now, and Walmart’s sales quadrupled to $460 billion, Businessweek says — and little black boxes on the other — tablets and smartphones. As we move deeper into a digital culture, there will be less need for pens, paper, printer ink, binders and most of the things they sell.
Do you still visit office supply stores, or see a need for them? Comment below or on our Facebook page.