In a stealth development program involving only a few executives, Office Depot quietly reinvented the office supplies retail model. The first of its Millennium 2 format stores, which the chains says are less expensive to open, more efficient to run and easier to shop in, opened June 30 in Venice, Fla.
Office Depot plans to add 80 to 100 new stores this year based primarily on the M2 concept, and realign its North American real estate profile to expand in areas where it doesn't have a strong presence, including Massachusetts, New York, New Jersey and Pennsylvania.
The new stores, which average 175,000 square feet of selling space, will include relocations, new construction and incorporation into the network of 50 to 60 of the Kids ‘R’ Us stores it acquired from Toys ‘R’ Us in March, says Joe Jeffries, director of store operations. Remodeling costs are expected to be $250,000 to $300,000, compared with $350,000 to $400,000 typically associated with Office Depot remodels, says Jeffries.
To achieve such dramatic results, Office Depot redesigned the copy area using 50 percent less space with no loss of revenue. Also, fast-moving items are bulk-stacked on pallets. And a pod format and clear sight lines make it easier for customers to shop, says Jeffries.
“The guiding principle was to further differentiate ourselves from competitors in a market where many customers can't even remember the name of the last office supplies store they visited,” says Chad Mikula, director of North American retail.