Unemployment Takes Toll on Office Supply Retailers

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Unemployment Takes Toll on Office Supply Retailers

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It's not good to be a nation-wide retailer these days with the economy slow and many people unemployed. It's especially not good to be one of the office supply chains, such as OfficeMax, Office Depot and Staples.

Along with loss of jobs, technology and mobility are also hurting office supply stores. More and more work is being done without the traditional office products - paper, pens and paper clips.

As the economic recovery picks up, sales from stores such as OfficeMax, Office Depot and Staples initially may look much better. At least for a year as they measure their sales results against weak comps from previous years. But, the mainstay of their sales is small business and consumers, a group likely to be slower coming out of the recession.

Office supply retailers are entering a time of major structural change. The process of office supplies procurement may well be changing to methods that more effectively address the automation of corporate America. Some analysts believe the office supply retailers will adapt but it may take time.

On the other hand, strong competition from big box retailers mixed with the economy points to potential difficulties. Some believe Target and Wal-Mart are particularly well positioned to further erode sales of office supply retailers.

While Wal-Mart and Target do pose some threat to office supply chains, they still rely on consumers walking the isles to buy supplies. They may slightly erode the consumer side of sales from office supply stores but not so much business sales. Businesses are not as likely to fight the parking lots and the cluttered isles of stores like Wal-Mart or Target.

As more people work from home, however, office supplies will see growth that may be ahead of the median retail industry numbers. When more positive employment news comes it is very likely there will be more sales of post-it notes, pens and paper.

The national office supply stores, if they adapt, can re-capture the market that has been missing during the recession.

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Tags: • officemax • business sales • corporate america • office supplies • paper clips • office products • office depot • office supply • work from home • traditional office products • office supply stores • office supply retailers •

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