…and on the vendor side
It has been a bit of a mixed bag for the main stationery and office products suppliers in terms of their second quarter results.
The standout performance came from the European division of cutting instruments vendor, Acme United, with year-on-year sales up a very impressive 75 percent, but this was very much an exception. Furthermore, Acme’s total company sales for the quarter were around $20 million, making it a relatively small company compared to the likes of giants such as 3M, Henkel, Newell Rubbermaid, etc.
According to data from NPD/IRI, the consumer stationery market in the US increased by 3.5 percent in the first five months of 2010, while research firm GfK indicates that the market in Europe for the same period actually experienced a decline of just over 1 percent. Second quarter figures from NPD for the US market suggest overall sales, both in the retail and delivery channels, to be flat or up in the low single-digits, so the market is hardly on fire in these mature markets.
Indeed, companies with the best results were generally those who have more exposure to the so-called emerging markets of Asia and South America, which have shown more robust growth rates. However, worse-than-expected growth data out of China at the end of August has highlighted the still fragile state of the world economy and indicates that continued higher sales, even these regions, should not be seen as a given.
Looking ahead, for the full year, it is likely that we’ll see flat or modestly increasing year-on-year sales overall as meaningful recovery in the all important jobs markets continues to lag in most major economies, and the latest employment data from the US is not encouraging.
This makes the back-to-school season doubly important for vendors (as it will be for resellers, too). Indications are that this year will be a stronger BTS than in 2009, but it is once again likely to be highly promotional, potentially hitting profits.