It may be smaller than some non-food categories, but sales of home office supplies are growing rapidly in supermarkets. Tesco, for example, claims sales of office supplies, from copier paper to filing cabinets, have rocketed by up to 50% in the last year.
And when you consider product margins can reach almost half the outlay for them, it’s easy to see why the category is so attractive.
According to MPA International’s report, The UK Office Products Market, the category is worth £802m to high-street retailers alone. Compared to high-street chains, grocery multiples hold the third-largest share, with combined sales of £110m per year, surpassing specialists such as Ryman.
Pat Shepherd, product development manager for stationery at Robinson Young, says: “We’ve seen considerable growth in box files, lever arch files and indexes for them. Three or four years ago, this market was mostly confined to the back-to-school season, but it has expanded enormously.”
Some of the biggest sales increases for the company are coming from ink cartridges for printers and refill kits. “Most multiples stock more computer-related items now and less writing paper,” says Shepherd.
Independents tend to stock more traditional stationery, he adds. But he says the market for computer-related emergency purchases, such as ink cartridges, is expanding, creating opportunities for convenience stores.
Many shopkeepers are nervous about ordering such products because they are expensive, but costs have to be balanced against customer demand and margins, he says.
Among multiples, Tesco and Asda lead the way in home office products, say MPA International, and stock more than 300 SKUs per store each.
Both retailers offer a mixture of branded and own-label items. Tesco says own label represents almost half its total business in the home office category. As demand has increased, it has redesigned product packaging under Tesco Home & Office to highlight that these items are suitable for small offices as well as the home.
Sainsbury, not to be outdone, says it is planning to extend its own brand into the home office category for the first time. A total of 140 Sainsbury stores stock its full home office selection.
It seems home office equipment is yet another area in which multiples can challenge high-street and out-of-town retailers. MPA International’s report adds: “The prospects of most grocery multiples are strong as consumers shop for consumables and stationery as part of their weekly food shop.”