Competition from e-commerce websites and discount department stores will hamper industry sales.
New York, NY (PRWEB) January 11, 2014
The Office Supply Stores industry has struggled to adapt to a changing digital landscape over the past five years. Weak consumer confidence, low growth in disposable income and poor corporate profit have all worked against the industry. However, the industry's performance has been largely affected by declining demand for traditional office products; more information and communication functions continue to shift to electronic mediums. “Consumers and businesses require less paper, pens and toner, sounding the death knell for many office supply stores,” according to IBISWorld Industry Analyst Andy Brennan. As a result, industry revenue is expected to decline 2.2% over the five years to 2013 to $2.8 billion. Despite the efforts of operators to diversify their revenue streams, the same trend will continue in 2013, leading to a 2.7% decline in revenue.
The industry, which includes only sales of office supplies made at brick-and-mortar stores and excludes online sales, has been further hampered by intense competition from e-commerce websites like Amazon.com and discount department stores that sell many of the same products at low prices. “Operator profit margins have come under pressure and office supply stores have sought alternative revenue streams other than core office products such as ink, toner and paper,” says Brennan. Tech support services and recycling services have become part of the long-term strategy for survival for many office supply stores. However, even Staples, the industry's biggest player (with a 58.7% market share), has experienced a fall in profit as it struggles to acclimate to the new digital landscape.
Although the worst appears to be over for now and the outlook is slightly better than the past five years, office supply stores will continue to battle against declining demand for core office products. Corporate profit is expected to rise over the next five years, allowing businesses to invest in office technology and equipment, which offers some respite for the industry. Staples and other smaller companies will continue to invest in concepts that allow customers a seamless buying experience across multiple channels. However, the industry is working against a strong tide.
For more information, visit IBISWorld’s Office Supply Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
The Office Supply Stores industry primarily sells stationery, school supplies and office supplies. Stores may also sell a combination of new computers, office equipment, furniture and supplies. This industry does not include general merchandisers or electronic retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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