Office Supplies and Stationery Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,200 firms in the US sell office supplies, school supplies, stationery, computers, office equipment and furniture at retail. Firms may also offer business-related services, such as printing, copying, mailing and shipping, or technology-related services, such as software installation.

Competition from Alternative Stores

Office supply and stationery retailers face stiff competition from a variety of alternative brick-and-mortar channels, including wholesale clubs, discount stores, mass merchandisers, food and drug stores, and computer and electronic stores.

Competition from Online Retailers

Like most of the retail industry, office supply and stationery retailers face intense competition from online-only channels, which offer convenience and enjoy lower overhead costs.

Industry size & Structure

The average office supply and stationery retailer employs about 33-34 workers and generates $4-5 million annually.

    • The office supply and stationery retailing industry consists of about 2,200 firms that employ 74,400 workers and generate about $10 billion annually.
    • The industry is highly concentrated; the top eight companies account for 84% of industry revenue.
    • Large firms include ODP Corporation (Office Depot and Office Max) and Staples. Stationery retail chains include Hallmark Gold Crown (independently owned and stores owned by Hallmark Cards, Inc.) and Paper Source (Elliot Investment Management).
                                Industry Forecast
                                Office Supplies and Stationery Stores Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Feb 1, 2024 - Prices Drop, Wages Rise
                                • In Q4, producer prices charged by office supplies, stationery, and gift retailers were down significantly compared to a year earlier. Amid softer demand, office supplies and stationery stores may be reducing prices to boost sales. In Q4 2023, average wages for office supplies and stationery stores increased moderately compared to the same period in 2022. Falling prices and rising wages may pinch office supplies and stationery store margins. Industry employment decreased substantially in Q4 2023, year over year.
                                • The rate of US business applications, a key demand indicator for office supplies, fell 1.3% in December 2023 compared to the prior month, according to the US Census Bureau. With a rise in business applications of 9.2%, the West was the only region that posted growth in December. Business applications fell 4.7% in the Midwest, 4.6% in the South, and 4% in the Northeast. Of the 20 major industry sectors tracked by the Census Bureau, eleven notched growth in October, led by mining (+125.6%), manufacturing (+46.8%), wholesale trade (+9.5%), and construction (+5.7%). Industries that experienced the largest drops in December business applications included utilities (-15.2%), retail trade (-12.5%), agriculture (-10%), and information (-3.6%).
                                • Persistent work-from-home patterns in the wake of the pandemic and years of overbuilding have contributed to the highest office vacancy rates in at least 40 years, according to The Wall Street Journal. In the fourth quarter of 2023, 19.6% of US office space was vacant, according to Moody’s Analytics. The Q4 2023 vacancy rate was above the previous high of 19.3% seen in 1986 and 1991. Office vacancies rose steadily in the late 1980s and early 1990s after decades of overbuilding, primarily in the South, where inexpensive land and relatively lax regulation spurred speculative office development. Many vacant office properties were built between the 1950s and 1980s, and the current demand is for more modern space. While office demand rebounded in the 1990s amid a rapidly expanding economy, the impact of remote work on current office demand means occupancy may take longer to recover. High office vacancy rates could reduce demand for office supplies.
                                • Office supply retail firm ODP Corporation (Office Depot and OfficeMax) recently reported third-quarter sales of $2 billion, down 8% compared to Q3 2022. The firm said the drop in sales was primarily due to its Office Depot consumer business, which had 71 fewer locations than during the same reporting period in 2022. The Office Depot division also experienced lower retail and online traffic and sales. Net income rose to $70 million in Q3 2023 compared to $67 million in Q3 2022. However, ODP downwardly revised its full-year 2023 sales guidance from approximately $8 billion to $7.8 - $7.9 billion.
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