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More positive outlook for office stationery

The Office Stationery Wholesaling industry in Canada has at long last turned the page on the recession and its lingering effects on demand for stationery goods, although evidence of any substantial industry revenue growth has yet to materialize.

"Demand for office stationery has been slow to improve in the past five years due to declining purchases of paper products among individuals, retailers and corporate clients," according to IBISWorld Industry Analyst Nick Petrillo. Office stationery wholesalers have also struggled to contend with rising competition from electronic mediums and office supply superstores that increasingly purchase stationery products directly from manufacturers. Over the five years to 2014, industry revenue has declined steadily at an annualized rate of 4.5% to $2.1 billion.

Beset with low profit margins and heightened competition, firm closures have been a perennial problem for the industry for many years. From 2009 to 2014, the number of industry establishments declined at an annualized rate of 2.0% to 753.

"As demand for office stationery products provides little room for optimism, regional firms have exited the industry while larger wholesaling firms have acquired several smaller distributors to improve dwindling profit margins," says Petrillo. In 2014, IBISWorld expects industry revenue to rise 2.0%. Industry consolidation will most likely continue for the foreseeable future.

Demand for traditional industry products is forecast to decline as well, which will require firms to diversify their product offerings to preserve profit margins amid wavering interest from individual and corporate clients. The industry must maintain sales relationships with major clients to continue any sort of stable revenue growth. The industry is expected to experience further consolidation as its largest firms aim to expand geographic reach and diversify the amount of products marketed to clients.



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