Bloomberg News

Staples Joins RadioShack in Pulling Amazon Store Lockers (2)

September 18, 2013

Staples Joins RadioShack in Pulling Amazon Lockers From Stores

Amazon.com Inc. has been taking sales from Framingham, Massachusetts-based Staples Inc. as it sells more office and school products. Photographer: David Paul Morris/Bloomberg

Staples Inc. (SPLS:US) and RadioShack Corp. (RSH:US) have removed Amazon.com Inc. (AMZN:US) lockers from their stores about a year after starting the program as competition stiffens with the online retailer.

The chains began testing a system last year in which Amazon shoppers could have a Web order delivered to a store and then pick it up for no extra cost. This allowed customers, especially urban apartment dwellers, to avoid being home to receive a package or risking a delivery being stolen because it had to be dropped off on a doorstep or in a lobby.

The decision to enter a partnership that made life easier for Amazon’s customers came at a time when the online retailing giant was already a major competitor to both chains.

“That was a little bit odd, but what they were hoping for was that when customers would come in to pick up stuff from the locker, they would pick up additional items,” said Brian Yarbrough, a retail analyst with Edward Jones & Co. in St. Louis. If they pulled the lockers, that means they probably “weren’t seeing the incremental sales out of the deal.”

Staples ended the test with Amazon after it “didn’t meet the criteria we set up together,” Demos Parneros, president of North American stores and online for Staples, said in an e-mail. The company declined to comment further on why it ended the partnership or how many lockers it had in place.

Didn’t Fit

RadioShack stopped the program because it didn’t fit with its strategy, Merianne Roth, spokeswoman for the Fort Worth, Texas-based retailer, said today in an e-mail. Chief Executive Officer Joe Magnacca, who took charge in February, is cutting items to reduce clutter in stores while improving displays to boost sales of major brands such as Apple Inc.

Mary Osako, a spokeswoman for Amazon, didn’t respond to a request for comment.

With Amazon and other online retailers undercutting RadioShack on price and selection, sales at the electronics chain have declined for the past six quarters (RSH:US), leading to a net loss of more than $200 million in that period.

Amazon has also been taking sales from Framingham, Massachusetts-based Staples as it sells more office and school products. Revenue at the world’s largest office-supplies chain has slid in seven of the past eight quarters. Staples also sells Amazon’s Kindle line of tablets and e-readers.

Staples gained 1.1 percent to $15.12 at the close in New York while RadioShack advanced 2 percent to $4.15. Amazon, based in Seattle, rose 2.6 percent to $312.03. This year Staples has increased 33 percent, RadioShack is up 96 percent and Amazon has risen 24 percent compared with a gain of 21 percent for the Standard & Poor’s 500 Index.

The fact that these chains were willing to help the customers of a major competitor “tells you it’s difficult out there and they are willing to try a lot of different things to bring people in the door,” Yarbrough said.

To contact the reporters on this story: Matt Townsend in New York at mtownsend9@bloomberg.net; Chris Burritt in Greensboro at cburritt@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • SPLS
    (Staples Inc)
    • $13.05 USD
    • 0.01
    • 0.08%
  • RSH
    (RadioShack Corp)
    • $0.91 USD
    • -0.05
    • -5.89%
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