Despite a challenging second quarter, Office Depot is showing no signs of giving up. The company is determined to strengthen the retail channel by reaching out to its customer base with new marketing, value propositions and product offerings.
The company attributed a larger-than-expected decline in retail sales to store closures in the past 12 months — it closed 31 stores in Q2 and plans to close a total of 75 for the year. Meanwhile, softness in store traffic and average order value of purchase fueled a 6% drop in same-store sales.
“We continue to build our capabilities across the organization as we focus on driving the omnichannel growth opportunities we have identified in the North American market,” said Office Depot CEO Gerry Smith. “I’m pleased that we have delivered year-to-date adjusted operating income that is ahead of the prior year and we remain on track to achieve our full year target. Longer term, we are maintaining our focus on executing initiatives to strengthen our existing business, expanding our last-mile advantage, while evaluating opportunities to transform the company for future growth.”
Some of the company’s strategic initiatives to increase basket include its revamped loyalty program and its renewed focus on attracting both regular consumers and business customers. It’s also aiming to boost traffic and sales via its private brand offering. Just in time for the highly competitive back-to-school season, for example, Office Depot has added more colors its line of private brand Tul pens and note-taking products. It also hopes to entice consumers and business customers alike with its recently launched line of Serta iComfort chairs under its WorkPro private brand that utilizes the same foam technology found in Serta’s premium mattress line. Sales for the whole year may still end up lower than last year’s, but Smith expects the rate of decline to improve in the second half of 2017 based on improvements in customer retention, implementation of new customer wins and growth from strategic business initiatives such as these.