Staples and Office Depot Antitrust in Amazon Age
In a recent New York Times article, the Federal Trade Commission’s (FTC) choice to block the Office Depot and Staples merger is based on the fact that companies and individuals do not purchase products, such as toner or ink, in the same way.
Amazon serves as an effective competitor against brick and mortar stores for individual consumers but Amazon does not have a track record of serving business customers even though its business-to-business website, Amazon Business, has generated $1 billion in sales in its first year. Both Staples and Office Depot have been hit hard in the past few years with Staples experiencing 242 store closures in 2014 and 2015 and a drop in sales of 6 percent to $21 billion while Office Depot has closed 349 stores in 2014 and 2015 and saw a drop in revenues of 10 percent to $14.5 billion.
Even if the FTC had decided to allow the merger of these two office supplies giants, it is possible that the resulting company could still not compete against online retailers such as Amazon. Most of the Staples and Depot stores Photizo has visited have two or three aisles of desktop laser and inkjet printers and some laser and inkjet cartridges. Most online pricing undercuts the prices in the stores. So, it begs the question, how can a brick-and-mortar store create a competitive edge against online stores for print hardware and supplies?