Drug presents opportunity to help office sector out of bind

The new year could mean opportunity for home-office product sales as consumers turn their attention to organizing and preparing for tax season.

Office supplies represented 2% of nonprescription sales in drug stores for the 52 weeks ended Oct. 3, 2009, totaling $900 million, according to AC Nielsen. That was a 3.3% dip in sales from the same period last year. Industry experts believed the category may be underperforming in the drug channel.

“Back-to-school and back-to-college are the biggest seasons for home-office products in the drug channel,” an ACCO Brands representative said. “It’s a convenience play, and stores are getting more aggressive with promotional offers, especially after many of the big-box retailers tear down BTS and run out of merchandise. The drug channel tends to be more of a destination once school starts since they have stock of products needed.”

Shelly Morick, president of Better Office Products Co., said she thinks drug retailers can grab a bigger share of category sales by devoting more space and promotions during BTS, tax season and second semester. Basic filing, presentation, envelopes, binders, sheet protectors and organizational products should be part of a stationery section year round, Morick said. Better Office Products’ line of eco-friendly, biodegradable and recyclable products addresses consumers’ interest in green products.

As in many other categories, retailers are turning to private-label products. CVS and Rite Aid stock private-label everyday home-office products, including three-hole punchers, magnets, binder clips and calculators.

Another area of growth is computer accessories. “Many drug stores consider this category as a small part of their overall business, and if they do something, it’s on an in-and-out promotion, but business is very steady on basic items,” said Liza Abrams, a spokeswoman for Sakar International. Abrams said the basics include two mouse offerings (wired and optical wireless), hubs, Web cams and surge protector electrical strips. Ethernet and extension cables, she said, are huge sellers at stores near colleges and universities.