Stationery Goods Retailing in Australia

The industry has contracted over the five years through 2013-14, with sales falling by an annualised 2.1%. Had it not been for the growing range of fashion-based stationery items and the scrapbooking phenomenon, this contraction is likely to have been more pronounced. Increased sales of fashion stationery items retailed by the likes of Smiggle, Typo and Kikki.K along with fine art supplies and scrapbooking products helped to partly offset lower sales of traditional office stationery items as usage rates continued to decline.

Falling paper consumption trends underlie much of this poor performance. According to data produced by the Australian Bureau of Economics, total Australian paper and paperboard consumption declined by an annualised 3.0% over the four years through 2011-12, with further falls expected for 2012-13 and 2013-14. In the case of printing and writing paper, consumption levels have fallen by an annualised 4.2% over the five years through 2011-12, with this trend expected to continue through 2012-13 and 2013-14.

WWW.IBISWORLD.COM.AU Stationery Goods Retailing in Australia October 2013 7

Industry Performance

Industry Outlook

In spite of the increasing array of glossy paper, prospects for the Stationery Goods Retailing industry are far from shiny. Similar to the past five years, industry performance over the five years through 2018-19 will remain weak, as pens and paper become almost obsolete in a technology-driven society increasingly dominated by new online communication mediums. Industry sales are expected to continue their downward trend. Revenue is estimated to fall at an annualised 1.9% over the five years through 2018-19 to $1.1 billion, representing its lowest level yet. In 2014-15, sales will fall by 2.0%, as discretionary expenditure patterns remain weak. Over the next five years, profit margins are likely to remain constrained by intense competitive pressures (both internal and external) and soft paper prices. While the niche, fashion-based stationery chains and the office product superstores are expected to continue their store rollouts, smaller independent players will gradually decline in relative importance. They will be unable to compete with either larger nationwide rivals (some of which are backed by the world’s largest office product supply companies) or the funky, designer-style product offerings of more fashion-based rivals. This will mean that enterprise,

establishment and employment numbers will continue to fall over the five years through 2018-19. Industry employment is forecast to contract at an annualised 0.8% over the five years through 2018-19 to 3,200 people in roughly 1,185 stores. Overall, the industry will remain in the decline phase of its life cycle, restrained by the saturated and mature nature of the products sold. Growth prospects may be slightly more favourable for those industry participants that embrace growing environmental concerns, stocking an increasing array of higher margin green products, including carbonneutral or recycled papers or soy-based

Ongoing consolidation continued

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