| This is smart for Staples, but the industry is still in trouble. They're going to get eaten alive by Walmart on the retail side and Amazon on the online side. Staples and all the other office suppliers do best in two areas: printing services and consumables. Printing services have massive margins. And consumables, particularly remanufactured toner, are big cash cows. Business machines are low margin or loss leaders. The stores are money losers. They would close them all if they could. They're used as feeders for their print business, value add for their contract customers, and sources of toner cartridges to be remanufactured. Walmart, with its school supply aisle, is the largest office supply retailer in the world. Their supply chain is far superior to anything in the traditional office supply world, and in retail pricing, it shows. Same goes for Amazon. They have massive economies of scale and a very well tuned supply chain. Walmart has been aggressively putting the hurt on the retailers, particularly in Back-to-School season (Christmas for office supply retailers) in the form of advertising and moving the supplies towards the front of their stores. Amazon dipped it's toe in the water with Amazon Supply. I'm surprised they haven't built an on-the-ground sales force to really expand it. I suspect that when they do, they'll take a big bite out of Staples. |