Los Gatos Weekly-Times

Office Depot opens town's third office-supply store

By Clarence Cromwell

Local competition to sell office products got one notch tougher when Office Depot opened the town's third office-supply store at 15166 Los Gatos Blvd. June 24, all three local office-product retailers acknowledged.

And officials at McWhorter's were a little peeved that the town let the competition in.

"I think they have a moral responsibility to the people who have been paying the sales tax and supporting the community for a number of years," McWhorter's President Steve Andrews said.

The Los Gatos McWhorter's, formerly the only office supplier in town, faced the first competition since its 1979 opening when Staples quietly opened its doors on N. Santa Cruz Avenue in November 1995.

McWhorter's representatives had been busy trying to hinder construction of the Office Depot store, even appealing its approval by the town Planning Commission. McWhorter's insisted that the Office Depot store would be architecturally out of place in Los Gatos and would create traffic problems.

The town pushed aside McWhorter's claims that the store would generate too much traffic, but ironed out concerns, shared by nearby businesses, that the Office Depot building would look like a huge, plain box; painted stripes were required. The store was approved Nov. 6, 1995.

Meanwhile, Staples appeared on the scene and opened up at 423 N. Santa Cruz Avenue the day after Thanksgiving, beating Office Depot's opening by about six months. Staples didn't need permits or other Planning Department approvals, because it moved into a building already zoned for retail business.

Now that all three stores are open, Andrews predicts that the Office Depot and Staples will pummel one another because their products, pricing and strategies are similar.

"I think it's going to be very difficult," Andrews said. "We will do OK. Our growth will be slowed. The two that will fight it out will be the Depot and Staples. And the Depot will probably drive Staples out of town."

He predicted that McWhorter's will escape the battle, because its products and services are substantially different from the other two retailers.

"Our business will probably level off, but we bring other things to the market that they don't," Andrews said. McWhorter's tries to stock a wider selection of products than the other stores and aims for a higher level of customer service. Andrews said he hopes the recent purchase of McWhorter's by a national office-supply conglomerate will give the store buying power similar to Office Depot's.

Andrews still criticizes the town for allowing Office Depot to open. He said the Planning Commission should not have allowed so many office supply stores in town, because the area may not be able to support all three of them. Planning Director Lee Bowman said the town doesn't regulate the numbers of a type of business: It lets competition weed out the weaker establishments.

Managers at the Office Depot and Staples acknowledged that the Los Gatos stores will battle one another, but said they're unconcerned.

"Well, the competition doesn't bother us; we're the worlds largest office-products retailer," said Gary Schweikhart, Office Depot director of public relations.

Office Depot tends to have the lowest prices because its huge stores give it more buying power than competitors.

Kim Shea, a spokesperson for Staples, said the company frequently opens stores near its two major competitors, Office Depot and Office Max.

"In many of the markets where we operate, we see all three," Shea said.

Staples district manager Anthony Oliver, who oversees the Los Gatos store, conceded the competition makes his work tougher.

"Office Depot does give us a lot of competition," Oliver said. "There's not a lot of control we can have over that. We'd love to own the whole market, but competition is always going to be there. There's plenty of room."