Local retailers say Staples no threat to their success

by Jan K. Allen

SBJ Contributing Writer

Managers of Springfield office supply companies say they do not believe the two new Staples stores under construction will have a huge impact on their businesses. Although most local dealers said the stores will have some effect on the market, it will not result in a dramatic loss of business for established companies.

"Hopefully we've been doing things right, and our clientele will keep coming back," said Jack Lorence, general manager at Office Depot, established in Springfield in 1990.

Staples will certainly add to the competition, Lorence added, but his store will continue to take care of customers the way it always has.

Lorence said that he does not look for pricing to change in reaction to Staples. In his assessment, Staples mainly concentrates on the office-supply market. Since Staples is more of a self-serve type setup, the biggest impact will be on smaller purchases and walk-in trade, Lorence said.

"Am I looking forward to them? No. Am I dreading them? No," he said.

Bill Abbott, Sr., owner of Springfield's Office Plus, established in 1910, said he does not believe the independent dealer will be affected much by the new stores. Local companies have built their trade on service and customer loyalty, he said.

The big dealers have the perception that they offer the lowest price, but overall they do not, he said. National chains run special items at a discounted price, but when a person looks at the average prices, across the board, for items not on sale, the cost for an order will come out about the same.

Abbott's company belongs to a national buying group that allows independent dealers to purchase collectively and keep their prices in line with major chain stores. In many cases, the independent has a lower price on frequently purchased items, Abbott said.

"Collective buying is what has made independents strong," he added.

Sales are up at Office Plus, and Abbott said he is grateful. He attributes his success to good service and competitive prices. The independent dealer is community-based and community-minded, he said, and Springfield is a community based on the small business.

At Office Max, in Springfield since 1993, Manager Mark Nienaber said he thinks the smaller stores will be more affected than his store.

"I've got to make sure I've dotted all the I's and crossed all the T's, but the Staples stores have always established where Office Depot/Office Max are located, so this is nothing new to us," he said.

The Staples stores do not have a large variety of furniture and technical equipment, but where the greatest impact will come remains to be seen, Nienaber said.

The furniture side of his business grows every year, he said, adding that he does not think this portion of sales will be affected by Staples.

Nienaber said he believes northside suppliers will be most affected with the addition of the northside Staples because most of the competing office supply stores have been located south.

The biggest effect, as Nienaber sees it, will be store hours. Some companies may have to adjust hours in reaction to the added competition.

Jeff Moseley, president of Moseley's Discount Office Products, established in 1940, agrees with Abbott the independent retailer will not be affected much by Staples.

"Our business increases every year, and the big stores can't even get close to our service level," Moseley said.

Like Abbott, Moseley belongs to a buyer alliance that allows him to stay competitive on prices while offering friendly, reliable service to his customers. Moseley strives to keep the brands his customers like on hand.

Big companies tend to switch brands and use leader items to draw in business, he said, but the discount they offer on one item is made up on others.

Moseley added that he has dedicated salespeople who keep informed on the latest products and call on customers regularly to make sure their needs are met.

"We're interested in long-term relationships," Moseley said.

He, too, feels the biggest impact will be from the northside store and that most of the business for the new Staples store on that side of town will be people with home offices and school children, he said.

Established in 1995, the Springfield satellite office for BT Office Products International will not be affected by Staples according to Eric Worley, territory account manager. BT has 1,100 offices worldwide.

Although the local branch has established a small retail center, it does not rely on walk-in trade. Most of BT's business comes from large corporate entities and through catalog sales by phone, fax or over the Internet.

Rather than run different sale items from week to week, BT takes the average lowest price on merchandise over an 18-month period and locks it in for one year.

Dealers agreed that population growth in the area will likely absorb any impact from the Staples stores, so the established companies will not suffer greatly.

While independent dealers were fearful of the establishment of Office Depot and Office Max in the early 1990s, the impact to their businesses was minimal, according to Moseley and Abbott.