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
Recent Developments
Apr 4, 2024 - Industry Sales Growth to Stay in the Red
- The office supply and stationery store industry is expected to continue to post negative sales growth for the next several years. The industry’s year-over-year sales growth rose 0.6% in 2021 before falling to -1.6% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth declined to -3.2% in 2023 and is projected to drop further to -4.1% in 2024, then see average annual growth of about -3.6% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Office supply retail firm ODP Corporation (Office Depot and OfficeMax) recently reported fourth-quarter 2023 sales of $1.8 billion, down 14% compared to Q4 2022. The firm said the drop in sales was primarily due to its Office Depot consumer business, which had 64 fewer locations than during the same reporting period in 2022. The Office Depot division also experienced lower retail and online traffic and sales. ODP posted a net income loss of $37 million in Q4 2023 compared to a net income gain of $36 million in Q4 2022. The firm’s full-year fiscal 2023 sales fell 8% to $7.83 billion from $8.49 in fiscal 2022. For its full-year fiscal 2024 sales guidance, ODP expects a decline of between 2% and 5%.
- The office supply and stationery store industry could see a downturn if economic conditions reduce small business marketing budgets and/or capital spending. In February, the US rent delinquency rate among small, independent businesses rose to 40% compared to 37% in January, according to a March report by Alignable, a social media outlet for small business owners. More than half of survey respondents (55%) said they were struggling with rent increases; of those, 16% said rent was up by 20% or more compared to six months earlier. Small businesses rated inflation as their top concern, as costs for supplies and labor were higher compared to six months earlier. The industries that struggled the most to pay rent included restaurants (with 43% of those surveyed saying they couldn’t make February rent), science and technology (42%), travel and lodging (41%), musicians and artists (40%), beauty (38%), gyms (38%), and real estate (38%).
- In February, the National Federation of Independent Businesses’ (NFIB) Small Business Optimism Index fell 0.5 points to 89.4, marking the 26th consecutive month of being below the 50-year average of 98. Nearly a quarter of small businesses (23%) cited inflation as their most significant problem. The percentage of small businesses reporting labor quality as their top business challenge fell five points to 16%, marking the lowest reading for the metric since April 2020. About 54% of those surveyed reported capital outlays in the last six months, down five percentage points from the previous month. NFIB Chief Economist Bill Dunkelberg said, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.”
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