The price of general office supplies has been rising at an estimated annualized rate of 0.2% in the three years to 2017. This trend takes into account the many types of supplies covered in the category. The price of writing utensils, for instance, has been rising an estimated 1.9% per year on average from 2014 to 2017. In addition, the price of paper has been falling at an annualized rate of 0.8% due to waning global demand for paper stemming from rapid digitization. Suppliers generally have slim margins and keep prices elevated to protect their costs, especially as various input costs fluctuate in line with the uncertain global market.
There is a baseline demand for many of the products in this market because they are often used on a daily basis. However, suppliers are unable to drastically raise prices due to the shift in consumer preference from print to digital products. Consumers have increasingly adopted digital products, such as tablets and smartphones, thereby reducing demand for print products and general office supplies. Decreasing demand for general office supplies has reduced the ability of suppliers to increase prices as they attempt to retain buyers.
Despite a minimal rise in prices, volatility has been low in the three years to 2017. Low price volatility benefits buyers because it reduces the risk of high year-to-year price shifts. Therefore, buyers have been able to accurately budget for office supplies. Buyers can also consider stocking general office supplies in bulk to receive discounts and lock in lower prices before they rise further.
During the three years to 2020, the price of general office supplies is expected to continue growing at an annualized rate of 0.7%. Increasing input costs are expected to drive price growth for general office supplies. The price of paper is anticipated to rise, driven by growth in wood pulp prices and operating costs. Overall growth in costs will compel suppliers to continue to raise prices, hampering buyer power as a result.
However, demand is expected to continue to decline slightly in the coming years, thereby tempering price growth. Consumer and business migration from print to digital products is expected to continue, driving further declines in the popularity of general office supplies. A rise in the percentage of services conducted online is expected to increase the popularity of digital goods. Furthermore, slight growth in the number of K-12 students and greater corporate profit levels are expected to sustain sales, but various office products will still continue to be phased out in favor of digital alternatives. The overall decline in demand for market products is expected to prevent suppliers from raising prices significantly.
In the three years to 2020, price volatility is expected to remain low, allowing buyers to make ad-hoc purchases without risking significant shifts in price. Also, low price volatility makes it easier for buyers to budget for future costs. However, buyers are advised to purchase soon to avoid further price growth. Buyers can also seek discounts based on larger order volumes to achieve lower per-unit prices.