Staples Business Up 9% in 2007

Filed Under (OP News & Views, The Competition) by Don on 05-03-2008

With all the mess going on with Office Depot (who is now under investigation by the SEC for leaking sales information to analysts) and the audits in Georgia and California we can’t ignore the big powerhouse in the supplies market, Staples.  Staples reports Q4 2007 sales increased a healthy 8%.  Staples online e-commerce increased 14% over 2006.  If you remember Office Depot blamed a soft market and the mortgage mess as their reason for lackluster sales.  However when Staples CEO Ron Sargent was asked if those were issues for Staples he said they had looked into the possibilities this had occured and determined that those issues had no effect on their business.  Analysts asked Sargent “why don’t you be more aggressive price competitors?” To which he replied, “Price is not a differentiator…great customer service is.”  Now mind you, I personally think Staples has a long way to go to give great customer service.  This is an area that independent dealers have a significant advantage but it is important to see that Staples recognizes this as being a core principle that requires committment.

It will be even more interesting in the coming weeks to see how the Staples purchase offer to Corporate Express plays out.  On another note I’ve been informed that Office Max employees have been placed on short work hours company wide.  My source tells me that employees were told no one is allowed to work over 38 hours per week.  I don’t know if this is just regional or not but my impression was it is corporate wide.

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