The author entirely misses - does not discuss, MANY supplemental factors.
1. Are the items in a Staples, Office Depot or Office Max inventory sold ONLY at Staples, Office Depot and Office Max. No. Many other retailers have expanded their offerings, and inventory volume of, items traditionally found mostly at “office supply stores” and now offered by all sorts of retailers, and/or in larger volumes than before.
2. Did the office supply store industry move into retailing additional lines of business, like computers? Yes. Is the state of that and their place in it what they were when they were at their height? No. Most “computers” are not sold at one of the office supply stores and they have not supplemented that fact by grabbing a big chunk of wireless phone cell sales.
3. Two words - Internet retailing.
4. Paper and printing and everything related to them is a shrinking % of making, communicating and saving business and personal communications, and a substantial part of inventory for an “office supply” store.
Those factors question “the economy is bad” theme as the only logical reason for the merger.
I don’t entirely disagree with you, Wuli, but your argument implies that an article about the merger of multibillion dollar conglomerates has to be exhaustive. In fact, an exhaustive treatment of such an issue would take a lot more space than I have (my columns are already two to three times longer than a normal newspaper columnists’ output... I try to stay under 3000 words no matter what)...
I don’t disagree, for example, that competition from Walmart and Target had an impact on the office supplies portion, and that online competition hurt them the same as online competition hurts ALL brick-and-mortar retailers, but these weren’t part of the point I was trying to make. (besides, Staples and OfficeMax actually HAVE done a decent job at their own online business).
And I think that the competition from online retailers and Walmart and Target actually argue in favor of why this merger isn’t an antitrust problem today, though it was in 1997... but again, that wasn’t the issue that I was addressing.
My point was that the merger is good for some people in some ways, and very bad for others, in other ways, but mostly, it’s a telling example of a fundamental challenge in our economy.
If our nation were in a boom cycle, like in Reagan’s second term when these companies were born, then there would be a boom of startups, exactly the kind of companies that need to shop at Staples, OfficeMax, and Office Depot. Startups aren’t yet able to negotiate huge online contracts or invoice their customers on EDI. Startups still buy desks and file cabinets (office supply stores are at least one-third furniture stores), Startups still buy paper and folders and paperclips... Startups still need to buy computers at a store where they can try them out because they don’t employ an IT guru to pick them or an IT buyer to negotiate the best price on a thousand of them from the manufacturer.
My argument is that it’s the lack of startups that’s killing these stores... and making life such a nightmare for the employees cut loose by these kinds of mergers.
I didn’t think I needed to create an exhaustive analysis of all aspects of the merger to make that case; perhaps I did.
Oh well; live and learn!
Cheers,
JFD