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Posted: 6:00 a.m. Thursday, Feb. 21, 2013

Why the office supply merger won't drive up prices



By Clark Howard


Now that Office Depot is going to buy OfficeMax, a lot of headline writers are scaring people into thinking the price of office supplies is going to skyrocket. But I'm here to tell you that's not the case.

The reason? The Big 3 of the office supply industry -- Office Depot, OfficeMax, and Staples -- are facing competition today that is so different from the recent past.

Amazon is a monster in the office supply market. They have effectively made the Big 3 into 98 pound weaklings. Then you have Sam's Club devoting several aisles in their stores to office supplies. The price at Sam's is a third to half less than the Big 3. And to a lesser extent, Costco is selling some office supplies too.

Whenever my wife is in one of the Big 3 office supply stores, she can't remember which one she's in because they all kind of look blasé. So this is a business in need of a hard reset.

As for all the headline writers going on about the cost of office supplies for business and school, well, they think prices will go up as a natural result of competition going down. But this is an industry that has vigorous, tough competition. And the latest news about Office Depot absorbing OfficeMax will have zero effect on your wallet.