a new office supply game.
But when office warehouses and office warehouses came to Little Rock earlier this year, some predicted the demise of traditional office suppliers. Guess what?
Many traditional enterprises are facing competition and are still standing still.
\"When they enter the market, they will have a blitz,\" said Wayne Hogan . \" He and his wife Linda own Galaxy office furniture in Little Rock.
\"Our ground traffic has been down for months.
But back now.
Dallas industry friends warned him that this would happen, Hogan said.
The entry of the super center into Little Rock has attracted people\'s attention and headlines (
Arkansas Business, June 3).
However, according to most suppliers, the customer checked the flashy and returned.
This does not mean that publicly held chains are not doing well.
But industry watchers believe they serve differently-
Maybe even new. -market.
\"You can\'t deny the fact that people buy there,\" said Hogan, who founded Galaxy.
Galaxy focuses on high-quality used office furniture.
Located in a central corner of East Markham and Cumberland Street, the store has an area of more than 40,000 square feet.
Hogan and others believe that the super center is defining a new market segment.
This segment includes small businesses and the growing home office market.
\"The market has been redefined,\" said Adriane Pray, a partner company. owner of Chair-
Technology Manufacturing and Supply Companyat Benton.
The office chair manufacturer, which opened in 1979, employs more than 20 people.
Pray uses the retail analogy.
\"Dillard will not go out of business, but the $12 Zoo in Puff will not go out of business,\" she said . \".
She added that most of her company\'s dealers are from the budget market, mainly in the southwest.
As their customers become more complex, the product has also been upgraded.
\"It makes us realize that we have left the low end of the market,\" says Pray . \".
Little ey\'s chief executive and president of office furniture and supplies in Little Rock, Jim Dailey, said in June that his business was isolated from the super center because it had
Daley says the landmark downtown store has the best August ever.
Dailey\'s ad campaign is \"in the yellow building\" and has been open since 1938.
As a result, the furniture dealer survived after entering the Central Arkansas market at the office supercenter.
But what about businesses that focus on paper clips and computer paper?
Strengthening competition \"Our business is stronger than ever,\" said Lynn Petes, owner of Pettus Office World, Little Rock West.
At first glance, the location of pettus does not look enviable.
But he\'s not complaining.
Office World is just across the street from Office Depot, West Mark Ham Street.
Eight months after Pettus opened the store, Office Depot entered the market.
However, Pettus said his business doubled between 1990 and 1991.
Pettus attributed his business success to several factors, including the provision of services that did not match the super center and the addition of a buying group to reduce costs.
\"Service is still the key,\" said Pettus . \".
He had customers calling to ask \"I have the ribbon for that machine \".
\"They got the right product.
\"A company spends an average of 1% of its revenue on office supplies,\" Pettus said . \".
\"But it\'s not just about price.
Pettus says 95% of his sales go out the back door.
Only 5% walk. in business.
Customers may have very little business in Office World, $100 a month and $4,000 a month.
Pettus\'s buying group, the buyer of the national office, has allowed his five-
The staff store is purchased at $60-
\"This keeps us in line with some of the larger contract companies,\" he said . \".
The purchasing group also helps members to market.
For example, it produces and sells leaflets at very little cost.
Four Arkansas office vendors belong to the same group as the Petes store.
Other members are in Pine Bluff, bertsville and Russell Ville.
Between them, they can \"cluster order\" items and they can divide orders once they arrive.
Despite Office Depot, Pettus says his profit has not declined.
This is because he uses better buying technology.
Pettus says these Supercenters have \"super discounts\" on 20 to 30 items, but he thinks traditional dealers can compete on other items.
How about the big boys at the local Super center?
Neither company will say it, but it is estimated that each company will need more than $5 million in annual sales.
Todd Hatfield, manager of the warehouse at Little Rock City office, only said that the sale of his store was on schedule.
As for the location of the office warehouse at the University Square Mall, Hatfield said, \"We were a little skeptical at first, but it worked well.
Hatfield says the store is now big
Tickets for furniture, computers, etc.
Of course, this is contrary to the industry\'s view of supermarkets.
Virginia Beach, Va. -
The headquarters company closed down. the-
On May 14, the same day it opened the little stone city store.
In what proved to be the worst initial public offering of the year, the stock was priced at $14.
$50 per share, now about $8. 50 per share.
Office Depot shares performed well, with sales of $0. 903 billion in 1990, up from $34 million in 1987.
Finally, there are 190 stores in the office warehouse and 32 office warehouses.
The average gross profit margin for Pop office supplies stores is 35%.
Gross profit margin for new suppliers is 24%.
The National Office Products Association estimates that traditional profits have fallen due to competition from the super center.
The concept behind the super center is that traditional retailers provide quality services and a lot of choices.
Their price is also very high.
Limited selection and limited service from warehouse.
They also offer low prices.
The super center claims to provide quality service, a lot of options and a low price.
However, some shoppers find services at the Super Center of Little Rock uneven.
More than $80, according to NOPA
There are billions of markets nationwide, worth $124.
Millions of markets in Central Arkansas
A few months after the Super center arrived in Little Rock, traditional office vendors continued to look for new niches in this $124 market --million market.