NAICS 453210: Office Supplies and Stationery Stores
This industry comprises establishments primarily engaged in one or more of the following: (1) retailing new stationery, school supplies, and office supplies; (2) retailing a combination of new office equipment, furniture, and supplies; and (3) retailing new office equipment, furniture, and supplies in combination with selling new computers.
Establishments primarily engaged in retailing stationery, school supplies, and office supplies via electronic shopping, mail-order, or direct sale are classified in Subsector 454, Nonstore Retailers; retailing greeting cards are classified in Industry 453220, Gift, Novelty, and Souvenir Stores; retailing new computers without retailing other consumer-type electronic products or office equipment, furniture, and suppliesare classified in U.S. Industry 443142, Electronics Stores; printing business forms are classified in Industry 32311, Printing; retailing new office furniture are classified in Industry 442110, Furniture Stores; and retailing used office supplies are classified in Industry 453310, Used Merchandise Stores.
This category includes stationery stores; office forms and supply stores; and firms engaged in the sale of school supplies, writing supplies, and notary and corporate seals. In the twenty-first century, the increased use of digital products has caused a fundamental shift away from paper-based products, which has harmed all firms, large and small, in the stationery stores market. According to a December 2015 report from the U.S. Bureau of Labor Statistics (BLS), the number of firms in the industry was around 8,981 in June 2015, continuing a decline that Page 1805 | Top of Articlebegan at least a decade earlier. Employment was also falling, with around 26,000 jobs shed between 2010 and 2015, when employment was around 120,000 nationwide.
BACKGROUND AND DEVELOPMENT
In 1775 pioneer papermakers of the now-legendary Crane family produced the paper used for the first currency of the young colonies. That paper was engraved by Paul Revere. The Crane family drew on the European tradition of making paper from cotton fibers and sold its products at the finest stores. As businesses grew in the nineteenth century, more typical mass-market quality papers were developed. Early stationers sold business stationery as well as other products that could be used in an office.
During the twentieth century, business supplies shifted from typing paper, envelopes, and writing utensils to electronic products. Each of these products had replaceable parts: inkwells and cartridges for pens, ribbons for typewriters, and later, computer supplies such as flash drives, modems, and computer-appropriate paper and labels. The stationery stores responded by expanding and changing their inventories to supply all of the needs of the new business world.
In the 1980s, new channels for stationery and office products emerged. These included superstores such as Staples and Office Depot, warehouse clubs such as Sam's Club, and mass-market stores such as Wal-Mart. Sales of stationery products and office products through these outlets expanded in the 1990s. No other mass-market retail channels have come close to office superstores and discount stores in stationery sales.
Sales in the retail stationery industry were somewhat erratic in the 1990s. The total sales volume was stagnant or declining slightly in the early 1990s. However, the industry recovered and grew slightly in the mid-1990s and continued to grow in the later part of the decade. Industry sales rose significantly in the late 1990s; sales of office supply superstore chains Staples, Office Depot, and Office Max together were estimated at $13.2 billion in 1997. Staples reported sales of $7.1 billion for 1998, while Office Depot's sales reached $8.9 billion. Office-Max, the smallest of the three superstores, had sales of $4.3 billion in 1998.
The overall industry extended its market presence via online sales. Industry leader Staples generated $5.6 billion in Internet sales for 2007, per statistics from Internet Retailer, and held the second spot in overall online retail businesses. These sales accounted for 29 percent of its overall business. Office Depot Inc. was third overall with online sales of $4.9 billion (32 percent of its overall sales) while OfficeMax was sixth with $3.2 billion (35 percent of its overall sales).
The stationery supply industry continued to be negatively affected in the late 2000s and early 2010s by the trend toward data storage, as companies continued to move information off paper and onto computer-based applications. Advancement in computer-based technology not only increased the amount of storage space and communication options but had also decreased the price of computer solutions to once paper-based applications. For example, the advent of cloud computing allowed firms to store significant amounts of information on web-based storage centers. E-mail reduced the demand for formal, printed business letters and résumés. The move to mobile computing allowed businesses and consumers to access information on their smartphones that had previously been printed on paper.
In addition, the financial recession during the late 2000s caused both companies and consumers to cut costs. Firms, which saw sales decline, especially during 2008 and 2009, slashed overhead. From 2010 to 2012, revenues were generally flat as the economy remained sluggish. As unemployment rose above 10 percent, consumers delayed major purchases and cut back on discretionary spending. As a result, many stores lost revenues. For example, OfficeMax's retail sales, which totaled $4.3 billion in 2007, declined to $4.0 billion in 2008 and $3.6 billion in 2009. While total revenue for OfficeMax was $7.12 billion in 2011, the retail segment only accounted for $3.5 billion of that amount. Office Depot's total sales declined from $15.5 billion in 2007 to $12.1 billion in 2009 and $11.5 billion in 2011.
According to U.S. Census Bureau statistics for 2012, there were 9,558 establishments engaged in the retail sale of stationery, employing 112,734 people. The industry generated total revenues of $22.8 billion. States with the most establishments were California, Florida, Texas, and New York; combined, they controlled about 21 percent of the market.
Nathan Layne and Nandita Bose, writing for Reuters in February 2015, discussed some of the ills afflicting the office supply store industry. They noted that “the U.S. market for office supplies sold in stores has been in a steady decline since 2007 and totaled $11.7 billion last year, according to Euromonitor.” Within this shrinking sector, industry leader Staples had a market share of 38.2 percent in 2014 while Office Depot had 31 percent. Both of these market shares were higher in 2013, reflecting the increased competition from big-box retailers such as Wal-Mart, Target, and Costco. One premise of the article by Layne and Bose was that office supplies were being offered by a wider spectrum of retailers in the mid-2010s, and as a result small-business owners were shopping wherever a bargain might be found or if it was Page 1806 | Top of Articleconvenient. “While four of those interviewed named Staples or Office Depot as their main destination for office supplies, another four cited Costco and one said she exclusively shopped at Wal-Mart. Five said they use local distributors, partly to support small businesses like their own.” Small-business owners were seen as a significant segment of the retail office supply market, and their shifting allegiances were troublesome for big-box office supply stores.
The Reuters article mentioned both Amazon.com and Uline as Internet-focused entrants in the office supply market, and a February 2015 report from the NPD Group discussed how this segment of the market was growing. Covering both office and school supplies, NPD placed the entire market at $11.7 billion in 2014, with bricks-and-mortar stores accounting for the lion's share ($10.6 billion) of that amount. Yet sales at physical locations were flat, while online sales grew by 15 percent to exceed $1 billion for the first time. While Staples and Office Depot had e-commerce channels, the entry of multiple Internet retailers into an already crowded (and collapsing) marketplace was another reason that both small stationery stores and office supply superstores were struggling.
The stationery and office products retail business is divided into two dramatically different segments: the office supply superstore segment and the smaller stationery stores. In the early 2010s, the superstore industry had three leaders—Staples, Office Depot, and OfficeMax. However, in 2013 Office Depot acquired Office Max in the hope the combined entity would be able to reduce operational costs and compete against Staples. Sales continued to slump, though, and in 2015 Staples agreed to acquire Office Depot. In late 2015, this move was being blocked by the U.S. Federal Trade Commission, which argued that the acquisition would reduce competition. According to a December 2015 Fortune article by Dan Primack, Staples and Office Depot were planning on contesting the antitrust block.
“Ecommerce Sales Reach $1 Billion for Office & School Supplies in 2014.” NPD Group, February 5, 2015. Available from https://www.npd.com/wps/portal/npd/us/news/press-releases/2015/e-commerce-sales-reach-1-billion-for-office-school-supplies-in-2014/ .
“Internet Retailer's Top 500 Guide.” Internet Retailer, 2012. Available from http://www.internetretailer.com .
Layne, Nathan, and Nandita Bose. “Bulk Retailers Are Hurting Business at Office Supply Stores.” Reuters, February 4, 2015. Available from http://www.reuters.com/article/office-depot-ma-smallbusiness-idUSL1N0VE34X20150205 .
Primack, Dan. “Why the Feds Don't Want Staples to Buy Office Depot.” Fortune, December 7, 2015. Available from http://fortune.com/2015/12/07/why-the-feds-dont-want-staples-to-buy-office-depot/ .
Reuter, Thad. “Staples'E-commerce Push.” Internet Retailer, January 26, 2012. Available from http://www.internetretailer.com .
U.S. Department of Labor. Bureau of Labor Statistics. May 2009 National Industry-Specific Occupational Employment and Wage Estimates, May 14, 2010. Available from http://www.bls.gov .
———. May 2011 National Industry-Specific Occupational Employment and Wage Estimates, March 27, 2012. Available from http://www.bls.gov .
———. “Quarterly Census of Employment and Wages: NAICS 453210,” December 8, 2015. Available from http://data.bls.gov/cgi-bin/dsrv?en .