So my District Manager comes in yesterday and wants to have a closed door conversation with me. He explains that there is a new pay scale for store managers based on your stores sales volume. He then proceeds to tell me that I am getting an $8000 per year pay cut. This is getting ridiculous! Maybe for investors this is a good thing, but not for the ones in the battlefield. What will really #$%$ me off is when they name a new CEO with a 6-10 million per year salary with a golden parachute.
Morale is horrible in the stores. We have had double digit decreases in my region for what seems forever. To be honest, OD and OMax are not the ones you should be investing in. If you insist on investing in office supplies then Staples is the only way to go! After the merger, OD/OMax will be closing overlapping stores and the only real winner will continue to be Staples.
We are no longer a high margin Office Supply store, we are a low margin technology store. Just look at our ads. We barely even advertise office supplies anymore. The turning point for OD is the Steve era of 2006 & 2007 when all he wanted was to show positive comp sales at the cost of small margins. At this point, I see little recovery in our future!
Everybody is taking a pay cut here but I fear that Office Depot will not be competitive and retain the best managers in the business for the future. Alot of people are going to lose thier jobs and taking a pay cut now will hopefully allow Office Depot and Office Max to retain has many employees as possible. We need to know who or what is going to lead the combine company and in what direction.
Manager, I've read several of your posts, and most of them seem to circle on low margin tech is the main downfall (asides your management thoughts). The reality is, yes supplies are higher margin and better business, but DEMAND is decreasing. Let me give you a real world example. My company office went from the traditional goods like paper, pens and staplers, to iPad's because the company felt everything should be digital. We wanted to save the need of printing on paper, and if we're not going to be writing on paper, then of course there is no need for paper, pens and staplers. Many businesses are and I'm sure individuals are leaning this way. Why do you think Staples is finally losing in sales, because they too cannot overcome the fact that supplies demand will continue to decline. I hate the thought of low margin tech products too, but if you don't have the latest and greatest goods, and supply sales are weak, no one will go to your store period. The other option, is grow services since margin is excellent there.
The demand like you said is not there but people still need items for there office. Maybe not paper, folders, and file cabinets. Services need to be but in focus and a very real change of the guard put in place. Stylus instead of pens, micro sd chips instead of paper, external hard drive instead of file cabinets, bluetooth devices such as keyboard, mouse, headset, speakers, printers. External hard drives and scanners to replace file cabinets. I very real push to offer G4 services like voice, text, internet, video. A new work force that understands Android and IOS instead of Microsoft.
So Office Depot is being crushed from both ends. Selling less paper and ink on one side and having the wrong focus technology wise on the other. Cellphones now sell for more than laptops and there services they pay ever month cut into every item and supplies office store sales. This merger is about cutting out the competition and leaving 2 players left. It is possible that another merger down the road may have to be done.
Hello Jamesbryan691'. Yes you are correct. The demand for supplies has gone down dramatically since the 90's. I remember selling 2 skids of red top case paper almost every day. (That's 80 cases). The problem is we can't survive on technology alone. There are too many players in that market... Best Buy, Amazon, Target, Walmart, etc... Are killing us in this area. Also as you stated, we are highly focused on high margin services. Our job depends on it.
There will be 2 players in this field... Staples & Office Depot/Omax. With morale at an all time low at OD, which would you invest in? Staples is and will be the front runner forever.
This is the issue all of us long term managers are facing. When to jump ship. If we jump ship, OD wins! We have had the luxury of a good salary, but now, we are capped lower than before. My main objective is to inform investors of what is going on inside the company so they can make there own decisions.