Office Supply Retailers Vie For Supremacy

Sep 08, 2004

By George Anderson

Staples, Office Depot and OfficeMax are branching out.

The three leading office supply retailers in the U.S. began their early years staking out their territory in their respective home markets. Staples set up shop in the Northeast; Office Depot in the South and OfficeMax took the Midwest.

As time passed, all three began expanding beyond their home turf but it has only been recently that the competition between the chains has heated up as they build stores within a paper airplane’s flight distance between them.

Office Depot, the second largest office supply chain, has stepped up its expansion in the Northeast after purchasing Kids ‘R’ Us locations after Toys ‘R’ Us decided to fold that business. The chain plans to open as many as 100 new stores next year with many of them expected to be in Staples’ backyard.

For its part, Staples has seen growth opportunities to the south and west of its Massachusetts home. The chain has entered the Atlanta, Dallas and Seattle markets and plans to add approximately 90 new units a year.

OfficeMax has taken a more cautious approach after being purchased by Boise Cascade last winter. The chain has closed 45 underperforming stores and has concentrated on remodels. It plans to open 50 new units next year and remodel 250 locations.

Moderator’s Comment: What is your assessment of the strengths and weaknesses of the leading office supply retailers? What will the individual companies
need to do to achieve profitable market share growth?

Ron Sargent, chief executive officer and president, Staples believes the North American market can support 4,000 office supply superstores. The three majors
now operate 3,300 units as well as online businesses.

George Anderson – Moderator

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