Boost for big boxes down under
Recent awards in New Zealand and Australia go to the power channel
In New Zealand the government recently awarded a controversial state sector-wide office supplies contract to power channel giants Corporate Express and OfficeMax.
This is the first contract which covers the whole of the state government sector in New Zealand, consolidating individual contracts with around 200 agencies into a single cooperative-type contract.
"We’re harnessing the collective buying power of the whole state sector for the first time, and the benefit to government and taxpayers will be significant," claimed Minister for Economic Development, Gerry Brownlee.
A number of similar contracts for other products and services are being introduced and the government says that, once all of the contracts are in place, they are expected to save more than NZ$115 million (US$82 million) over the next five years.
The move has been criticised by the opposition Labour Party in New Zealand which said that the "plan to award lucrative state sector contracts to a cosy club of multinational suppliers will cut competition and lock out local business".
"New Zealand needs a strong government procurement policy which maximises opportunities for competitive local businesses when tendering for large government projects," said a Labour Party statement. "Instead we have a government which is maximising opportunities for large companies based overseas."
Corporate Express and OfficeMax will now form the panel of suppliers from which state sector agencies can buy their stationery and other office supplies.
Meanwhile, across the Tasman Sea, OfficeMax in Australia has teamed up with the country’s national postal service to offer an online office supplies store.
The site – auspost.com/stationery – went live on 2 August and comes as part of Australia Post’s expansion into online services under a newly launched renewal programme called Future Ready.
Whether it is the role of a national postal service to provide office supplies is a matter for debate, but the organisation’s nationwide distribution and delivery capabilities could make it a serious rival to local dealers. As a demonstration of this power, the launch was preceded by a massive mail shot that provided recipients with a temporary password to log into the site.
"Every day we deliver 20 million items to Australian addresses and our partnership with OfficeMax will enable us to deliver a range of affordable office products around Australia," said Australia Post Merchandise Services Manager, Rowan Howarth.
The site says that it offers 10,000 products, including desk stationery, technology hardware, consumables, cleaning items and furniture.
Australia Post said the site could be used by consumers, but that it was really targeting small business for their everyday office supplies needs.
Officeworks on the up?
Latest findings from Australian OP consultancy Penfold Research suggest that leading retailer Officeworks has increased the gap between itself and its nearest rivals.
In its newly released Australia market report, Penfold Research says that Officeworks has a market share for office products of 16 percent and has widened the gap between itself and the second player Corporate Express/Staples (12 percent) over the last two years since its last report.
Officeworks has been posting improving results since a turnaround was initiated by new owners Wesfarmers a couple of years ago. Annual sales at the chain’s 128 retail outlets grew by 9 percent according to recently released results while Staples says that its business in Australia – which focuses more on larger accounts – is flat.
Penfold Research says that Net Promoter Scores – a measure of customer goodwill – highlight a surprisingly high portion of purchasers who are unimpressed with their OP resellers.
Interestingly, it is the independents (in particular Office Choice and Office National), as well as Officeworks, who have the highest portion of happy customers.
Penfold – which puts the total office products market in Australia at A$12.35 billion (US$10.9 billion) – says that the market contracted in 2009 for the first time in almost 20 years, but adds that growth is expected to return this year, although it will be held back by lingering consumer frugality that will not fully dissipate until 2011.
Niche players such as fashion stationery retailers Smiggle and kikki.K have been enjoying "significant growth" said the report.