Thursday, March 6, 2014

Staples Closes Stores

Now it is Staples’ turn to announce store closings. It already closed 40 stores in North America last year, and it says it will close 225 more this year. This is perhaps a prudent adjustment for a retailer that sells supplies for office paperwork. It becomes more urgent after sales declined by 6 percent in 2013.

Staples’ largest competitor, Office Depot/Office Max, will surely be closing stores too, but perhaps not right now. It will not want to lose customers by closing stores too soon after its recent merger. Office Depot and Office Max have tried to imitate Staples’ broader product selection with items such as furniture, but they have not been entirely successful, so that most customers probably think of their stores as sources for paper, ink, and toner. But paper and printing are in decline. The days of printing a computer document just to put it in a file cabinet are all but over, so it is a dubious market position looking forward to next year.

This is a problem for Staples too, and it knows it, even if it does not quite know what to do. Staples’ main initiative of the past year, to sell more of the same products on its web site, is not much of an answer in the long run. Another experiment, operating post offices in some stores, targets another declining category and is not likely to return much of a profit unless Congress succeeds in closing the real post office.

Of course, part of Staples’ difficulty is the decline in big box stores in general. Shoppers increasingly find the big-box environment oppressive and bewildering and are eager for any alternative.