The advancement of technology has upped the ante on convenience for the general public. It seems that almost every service or purchase is being made available to the consumer via some online function or smart phone app. In addition, the rising cost of gas has kept many people at home to do their shopping, rather than expending the gas to travel to a physical store for the things they need.
There is evidence to suggest that purchasing things online or even learning how to build items from scratch can save the consumer money in the long run. When a store receives the inventory to stock their shelves, they often have to pass the cost of shipping and housing the inventory on to their customers. Therefore, things on the shelves might be more expensive for the consumer than if they were to purchase the same item online. One would think that a consumer may then be stuck with the cost of having their item shipped to them. However many online stores offer savings vouchers that can be applied to shipping, or as in the case of Amazon.com, consumers can pay a minor yearly fee and have their items shipped to them for free for that entire year. Unfortunately, the convenience of online shopping has placed many brick and mortar stores, such as Office Depot, in a difficult position. These retailers are now finding it necessary to close the doors of many of their store locations.
It is not hard to see why. The cost of running a physical store is very high, leaving many retailers in the tough spot. A majority of the time, it is difficult just to break even, let alone turn a profit. Necessary expenditures such as electricity, running water, salaries, property rent and taxes, security systems, and purchasing and housing the inventory can be a huge burden for any business. And when you’re in competition with many other office supply entities, such as Office Max, Staples, and even Amazon.com, justifying these monthly expenses can be difficult.
At this time, there is no solid evidence that Office Depot is permanently closing its doors or filing for bankruptcy. However there are reports that, due to operating costs, they have closed 10% of their underperforming store locations all over North America during the last several years. Unfortunately if the economic climate does not improve soon, we may see many more retailers making the same cost-cutting moves. And perhaps down the line, Office Depot may eventually end up on the chopping block.