Staples/Office Depot merger blocked by judge

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Re: Staples/Office Depot merger blocked by judge

Post by wnetmacman »

pseudo3d wrote:Even before the merger, OfficeMax and Office Depot did have rather similar merchandise mixes. I do seem to remember OfficeMax had a pretty big selection of office furniture, and when it moved locations in my town to a smaller (but more visible) location, that was the department that got the biggest cuts. I don't think the solution is to attempt to round up the remaining big boxes, because two weaker companies trying to consolidate in a shrinking market is never a sound strategy. I don't think Office Depot/OfficeMax has met with a lot of major success
Of course they had similar merchandise mixes. They were direct competitors. OfficeMax always had better technology areas; OD was for a long time very narrow in that area compared to OM. The stores were laid out differently too; OD had warehouse racking around the outside perimeters of the stores, where OM used them throughout. OM sometimes had better pricing too, but they weren't as committed to being the leader as OD was.

Staples has a huge tech section; always had. But I can price things high and claim I have better service all day. The OD/OM merger hasn't been successful because OM was near total failure. OD just really preserved the name more than anything; the stores will soon be just like OD's.
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Re: Staples/Office Depot merger blocked by judge

Post by storewanderer »

I always found Office Max to be the weakest of the chains. In my market when they competed with Office Depot they just never did as well. They went out of business years before the merger in the two locations in my area where they directly competed. I am not sure what it was about Office Max. The points raised here are all correct: they did have a larger technology section and furniture section than Office Depot. But the stores just never seemed to draw in many customers.

The last Office Max in Reno which just closed was already an Office Depot in all but name. The receipts even said Office Depot Store xxxx and it had a new store number. The employees wore Office Depot name tags. Some things like the ads and bags did have both logos. It was really interesting how much Office Max private label stuff they had to liquidate during the store closing sale. There was an awful lot of that sitting somewhere.

All of these people tried selling their items within the grocers. Office Depot items at Albertsons, Office Max items at Safeway, Staples items in Kroger owned stores back in the early 2000's around tax season... it never worked. That ship has sailed. The supermarkets are better off sourcing a few fast moving items like pens and copy paper on their own. Kroger has a very extensive mix of Office Works brand items already. Not sure how Albertsons and Safeway handle private label office supplies these days but in the past Albertsons had a fairly extensive line of private label office supplies as well; pencils, lots of tapes, paper, etc, mostly holdovers from items that were once Osco brand.
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Re: Staples/Office Depot merger blocked by judge

Post by pseudo3d »

storewanderer wrote:I always found Office Max to be the weakest of the chains. In my market when they competed with Office Depot they just never did as well. They went out of business years before the merger in the two locations in my area where they directly competed. I am not sure what it was about Office Max. The points raised here are all correct: they did have a larger technology section and furniture section than Office Depot. But the stores just never seemed to draw in many customers.

The last Office Max in Reno which just closed was already an Office Depot in all but name. The receipts even said Office Depot Store xxxx and it had a new store number. The employees wore Office Depot name tags. Some things like the ads and bags did have both logos. It was really interesting how much Office Max private label stuff they had to liquidate during the store closing sale. There was an awful lot of that sitting somewhere.

All of these people tried selling their items within the grocers. Office Depot items at Albertsons, Office Max items at Safeway, Staples items in Kroger owned stores back in the early 2000's around tax season... it never worked. That ship has sailed. The supermarkets are better off sourcing a few fast moving items like pens and copy paper on their own. Kroger has a very extensive mix of Office Works brand items already. Not sure how Albertsons and Safeway handle private label office supplies these days but in the past Albertsons had a fairly extensive line of private label office supplies as well; pencils, lots of tapes, paper, etc, mostly holdovers from items that were once Osco brand.
I do seem to remember some office supply type merchandise when the local Albertsons closed in 2011 (I can't remember the brand, it was either Office Depot or Staples), but it was also a huge store (~80,000 square feet according to local appraisal districts, it was a former Randalls). I suppose that the big problem is that the space could be better utilized for faster-moving items (printer ink cartridges?!). Probably the same reason why these Ace Hardware stores inside supermarkets are in lower-volume independents (gotta have higher profit-margin items).
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Re: Staples/Office Depot merger blocked by judge

Post by storewanderer »

Albertsons added ink cartridges to its stores with the Office Depot program. That was a key addition at a time when no other supermarket sold printer ink. Since then in my area I see the printer ink at larger Kroger banner stores (not priced competitively) and also at Walgreens or Rite Aid (also not priced competitively). The ink was a frequently shoplifted item back with Albertsons over a decade ago and they learned fast it had to be kept locked up (in the case of the stores in my area it was kept at photo as the stores had 1 hour photo at the time). I think the result of that was few sales and few people knowing they had ink.

That Office Depot program Albertsons had also integrated nicely into the Osco/Sav-On Stores which had an aisle typically dedicated to office supplies. The Albertsons of a decade ago did a good job with drugstore type merchandising due to using the combination store mentality and having a large mix. They also did a good job with promotions on drugstore items and had a very deep private label offering in the drugstore categories. Drug was a very profitable operation for the old Albertsons (both freestanding drug and the operations within the supermarkets). Unfortunately the new Albertsons seems to be going with the Safeway mentality of having a limited mix of drugstore type items and very high pricing/few specials.
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Re: Staples/Office Depot merger blocked by judge

Post by pseudo3d »

storewanderer wrote:Albertsons added ink cartridges to its stores with the Office Depot program. That was a key addition at a time when no other supermarket sold printer ink. Since then in my area I see the printer ink at larger Kroger banner stores (not priced competitively) and also at Walgreens or Rite Aid (also not priced competitively). The ink was a frequently shoplifted item back with Albertsons over a decade ago and they learned fast it had to be kept locked up (in the case of the stores in my area it was kept at photo as the stores had 1 hour photo at the time). I think the result of that was few sales and few people knowing they had ink.

That Office Depot program Albertsons had also integrated nicely into the Osco/Sav-On Stores which had an aisle typically dedicated to office supplies. The Albertsons of a decade ago did a good job with drugstore type merchandising due to using the combination store mentality and having a large mix. They also did a good job with promotions on drugstore items and had a very deep private label offering in the drugstore categories. Drug was a very profitable operation for the old Albertsons (both freestanding drug and the operations within the supermarkets). Unfortunately the new Albertsons seems to be going with the Safeway mentality of having a limited mix of drugstore type items and very high pricing/few specials.
Can't comment on the Albertsons mix within stores since I can count the times I've been inside of living Albertsons stores I've been to in the last past 5 years on one hand but I had gotten the impression that Safeway was improving their mix, not the other way around (the Albertsons/Safeway conversion in Florida not withstanding). Part of this is the loss of the extensive Equaline brand I imagine, which by contract wouldn't be allowed in Safeway stores (hence why it was gone in Florida too). Due to this loss, I think it would make more sense for them and Office Depot (or another drug store-compatible brand) to partner up again.

Bringing this full circle, I just can't imagine that Office Depot is that bankrupt of ideas that it thinks that trying to merge with Staples is the best strategy just after buying up OfficeMax.
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