Retail sales slump for the ‘Big 3’

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OPI is pleased to bring you the first in a regular feature of quarterly reports on retail sales trends at the main three office superstore chains in the US in partnership with New York-based consumer and retail market research specialists NPD.

NPD’s Office Supplies Superstore Retail Tracking Service presents a view of the office supplies industry based on point-of-sale (POS) information reported by Staples, Office Depot and OfficeMax, breaking the sales down by product category, as you can see in the table.

"The data is real scanned data from stores, not based on consumer surveys," says Perry James, NPD’s director of office supplies. "As you can see, the first quarter of 2008 was marked by a sharp decrease of 11 percent in dollar volumes, primarily due to the current weak economic environment."

James also says that office supplies is not an exception in the market – other consumer categories that NPD tracks are also showing similar patterns. "Take something like print consumables," he points out. "People are genuinely asking themselves ‘Do I really need to print this out?’ and this is showing up in our data."

Some retailers have argued that the early Easter holiday in 2008 made a noticeable impact on sales. James says that this does not have a major impact in the data NPD has received.

"If we look at the figures from January through April, we can see a 10 percent fall in dollar terms – not as dramatic as the first quarter drop, but we can clearly see that overall the market is trending downwards quite significantly."

Nor do the figures reflect heavy discounting on the part of the retailers. According to NPD overall unit volumes for the category were down by 14 percent in the first quarter, compared to 11 percent in dollar terms, indicating that, on the contrary, some price increases were passed on to consumers.

Unit volumes in the worst performing dated products category, for example, which includes calendars, appointment books, planners and organisers, were down by an alarming 28 percent.

Interestingly, the beginning of 2008 appears to mark a significant softening of the market.

"In the fourth quarter of last year we actually saw dollar growth of 3.7 percent in the office supplies category," said Perry James. "The downward trend is really something that is taking hold in 2008, so far, but obviously we don’t know yet how the rest of the year will turn out."