Article: Continued Slump Seen for Office Depot

Over at GoErie.com, the web division of the Erie Times News, columnist Malcolm Berko has some dire predictions for Office Depot. In addition to their nefarious dealings, which we have covered at this blog in great detail, there are also a lot of elements of this once-great company that call its future into question. Some of Berko’s highlights?

1. Nearly 80 percent of its customers are small businesses and the economic slowdown is forcing these firms to reduce purchases, become more efficient and to search for less expensive products.

2. Office products are a lucrative $350 billion market and are attracting the attention of big box merchants. But, ODP has failed to acquire the scale advantages or supply chain efficiencies to compete with these lower cost providers.

3. Office Depot’s management really “stinx.” Proof of the stink is the ignominious failure of management’s multiyear plan to improve profitability, remodel stores, expand inventory of private label merchandise, streamline operations, improve efficiency of store employees, and increase working capital.

Since the article is primarily focused on the big-box world, I won’t fault Berko for not mentioning the upswing in reliable, affordable online retailers. A common oversight, but one that big-box giants are going to be hard pressed to ignore for long. In the meantime, as much as it warms my heart, this article is nothing new. It’s just nice to see more and more people taking notice of how these corporate mega-stores are losing ground in the ongoing race for your office supply dollar. Soon we won’t have to talk about them at all.

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