With Office Depot’s depressing quarterly results already in and preliminary figures from Staples and OfficeMax confirming falling sales, data from market research firm NPD’s retail tracking service shows negative results across virtually all categories of basic office supplies.
NPD’s data tracks the total US sales of office supplies at Staples, Office Depot and OfficeMax from both their retail stores and contract businesses, including figures from Corporate Express.
As can be seen from the tables at the bottom of this article, sales in both segments fell by an average rate of 5 percent in dollar terms when compared to the third quarter in 2007, with only one category – retail sales of Presentation and Reference products – not posting a decline.
NPD’s data tracks the total sales – comparable stores sales declines are typically a few percentage points lower, as already seen in Office Depot’s results.
"The monthly sales figures give a better picture of how the quarter actually evolved," says NPD’s Director, Office Supplies, Perry James.
"For the retail figures, sales in July fell by 7 percent as consumers held back on their back-to-school spending as long as they could. In August there was a drop of 1.8 percent, representing something of a rebound as some of the pent up back-to-school demand was released, though there was still a year-on-year decline. In September, we saw the trend of high single-digit declines continue with a decrease of 6.2 percent."
James says that final figures for October are not available yet, but early results are pointing a continued decline in the high single digits.
"We noticed a slowdown in discretionary spending, even within the office supplies category," continues James. "Items such as staplers, scissors and fine writing products which didn’t need replacing, weren’t."
Basic items which needed replenishing fared better, while some presentation items were boosted by promotional campaigns.
Higher ticket items such as furniture and technology products were hit the hardest – office furniture sales in the office super stores retail channel slumped by 18 percent, while technology products/consumer electronics fell by 12.8 percent.
And with the technology/consumer electronics segment representing retail sales of $1.6 billion for the quarter at the three superstore chains, average total sales across the three product categories (office supplies, furniture and technology) look like being down by around 10 percent.
Staples, once again, appears to have fared better than its two main rivals in both the contract and retail divisions.
Preliminary results from Staples show a 1 percent decline in contract sales compared to 10 percent at Depot and 14 percent at ‘Max, while at retail Staples predicts same-store sales down by 8 percent versus 14 percent for Depot and 11 percent at ‘Max.
In addition, Staples’ quarterly results include the month of October – generally viewed as a weaker month than July – meaning that a real month-by-month comparison would see the Framingham-based company come out even further ahead of its rivals.
Table 1 – Office Superstore Retail Sales:
Table 2 – Power Channel Contract Sales: