Why Your Local Postal Workers Hate Staples

Office-supply giant Staples (NASDAQ: SPLS  ) has been struggling recently due to the secular decline of major categories like PCs, ink, and paper. North American comparable-store sales declined 4% last year. With sales falling, Staples has found that it has far too much space in its stores, and it is therefore looking to downsize to smaller formats.

Staples has been hurt by falling demand for key office supplies like paper.

In the search to better utilize its real estate, Staples began a pilot program with the USPS last fall to offer mini-post offices in 82 stores. In addition to selling stamps, these stores sell domestic and international mail and package services, including Priority Mail. Unlike the Post Office, Staples offers these services seven days a week with evening hours.

However, the largest USPS union -- the American Postal Workers' Union -- has protested vehemently against the agreement allowing Staples employees to sell postal services. The union has picketed numerous Staples stores, and it is now working with other unions to organize a boycott of Staples.

Protecting high-paying jobs
It's pretty obvious why the APWU is putting so much effort into pressuring Staples to end its mini-post office pilot (known as the Retail Partner Expansion Program). Postal clerks are paid an average of $25 per hour according to the union; meanwhile, a typical Staples store employee makes less than $10 per hour.

With the USPS consistently losing money and mail volumes declining, the postal service is always looking to cut costs. If the USPS were to outsource a significant amount of mail handling to lower-paying subcontractors, it could significantly cut its costs. As a result, the APWU sees low-paid Staples employees as a serious threat to its members' jobs.

Postal workers are worried about having their jobs filled by lower-paid Staples employees.

Accordingly, in April the APWU organized protests at 50 Staples stores across 27 states. The union has portrayed the Staples pilot as the first step toward privatizing the post office, despite promises to the contrary from USPS management. It has also criticized Staples employees as being unqualified to handle the mail, whereas USPS employees "swear an oath to protect your letters and packages."

(To be honest, many of the postal workers I have interacted with over the years have been nice -- some not. Most have seemed competent -- a few less so. But none of them looked like they would be willing to take a bullet for the mail. As the saying goes, this dispute is "all about the Benjamins.")

Since the protests didn't manage to derail the Retail Partner Expansion Program, the union is escalating its tactics. The APWU is now encouraging its members to boycott Staples stores. Several teachers' unions that are also under the AFL-CIO umbrella have signed on in solidarity. This is important because Staples stores do a big business in school supplies.

Staples is in a bind
The allure of the USPS pilot for Staples should be clear. Foot traffic at Staples stores is falling, and opening postal counters in stores could bring in customers who might shop the rest of the store. Additionally, it makes better use of floor space in stores and leverages store labor that is needed anyway.

However, the APWU recognizes that Staples is struggling almost as much as the USPS, and it is using that vulnerability to put pressure on Staples through picketing and a boycott. While a full rollout of the Retail Partner Expansion Program to all U.S. Staples stores would make sense from a business perspective, Staples cannot afford to lose millions of potential customers to a boycott.

Operating mini-post offices makes sense for Staples -- as long as the backlash is manageable.

Unfortunately, Staples doesn't have a very good way to stop the damage. The APWU wants Staples to hire official postal workers -- at official postal worker wages -- which would quickly put Staples' mini-post offices in the red. If boycotts are hurting Staples more than the mini-post offices are helping, the company will have to cave in and drop the pilot program.

Foolish bottom line
When Staples signed up for the Retail Partner Expansion Program last fall, it probably saw the move as a nice way to shore up customer traffic while making better use of store resources. Instead, it has provoked the wrath of the American Postal Workers' Union, prompting protests and a growing boycott that is also supported by several teachers' unions.

Staples simply cannot afford to have a weak back-to-school season. It needs to try to figure out if calls for a boycott are actually being heeded. If so, Staples needs to drop out of the pilot and ensure that the boycott ends. If the boycott doesn't seem to be hurting sales, than Staples should continue this experiment -- at least long enough to gauge its potential benefits.

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  • Report this Comment On June 22, 2014, at 3:06 PM, romikk32 wrote:

    "With the USPS consistently losing money"

    Let's be fair; the Only reason the USPS is LOSING because the US Federal Govt under George Bush began a campaign to bankrupt it. They signed into law requiremnst of prefunding that no other business public or private has ever had to put out. Currently to the tune of 75 Billion dollars(FERS), and 55 Billion(CSRS) that the Government has stolen off the top every year, Two separate GAO audits have found that this is unecessarily high and called for a partial return of the funds..the Republicans and Dems in Congress realize they have already SPENT this money and are planning on burdening the taxpayers because of their fraud. The USPS has been in the black opertaing with surpluses for 8/last 9 qtrs..last Qtr(spr2014) they made millions, before that..qtr(Dec13) they made over 600 million in the black..then the us govt comes along and steals 8 BILLION. what kind of company can be fiscally sound with that sort of theft? The fact that UPS, Fedex, and DHL all use the USPS as their last mile delivery agents because of the low cost, quality, and size of their network, while moving Mail on their private planes for the USPS..basically a proof positive the quality of the service you receive from the if we could just get the Federal Govt and darrel Issa to stop trying to bankrupt them, and curtail their service strengths...we'd be loss of one service day(Saturday) will begin a death spiral( he snuck privatization wording in his legislation) that will force eveyone onto the NSA monitored ecommerce..and the beginning of the end of a cash society. Protect your LAST bastian of free and unmonitored speech..if the Pubes and congress kill kills the USPS and freedom falls again to the fascists

  • Report this Comment On June 23, 2014, at 3:53 AM, BambiB wrote:

    Staples is anti-Second Amendment.

    I used to do business with them.

    No more.

  • Report this Comment On June 23, 2014, at 10:57 AM, JohnHarris wrote:

    This is a no brainer:

    Pay a Staples employee $10 an hour to provide round the clock, be polite or get fired, postal services such as processing incoming packages and selling stamps


    Pay a slow, bitter union protected government slug $25.00 an hour to do the exact same mindless job with a miserable attitude who will only work until 4 pm and can't be fired unless they kill someone no matter how nasty they treat customers and fund it by asking Congress to allocate more tax revenue and rising the price of stamps every year.

    Anyone who thinks this is a tough decision is an idiot.

  • Report this Comment On June 23, 2014, at 1:08 PM, JohanStrauss wrote:

    Three weeks ago, I'd ordered a vintage Durobor pour-over single-cup coffee press. When I received it, the glass was broken. I emailed USPS "customer service"...and have yet to receive a reply. USPS doesn't give a hoot in hell about your deliveries, so I hope they all go broke and their pensioners lose their free money.

  • Report this Comment On June 24, 2014, at 8:55 PM, TMFGemHunter wrote:

    @JohnHarris: I agree that the logic is something like this, but I should point out that Congress doesn't actually allocate any tax revenue to the post office.


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Adam Levine-Weinberg

Adam Levine-Weinberg is a senior Industrials/Consumer Goods specialist with The Motley Fool. He is an avid stock-market watcher and a value investor at heart. He primarily covers airline, auto, retail, and tech stocks. Follow him on Twitter for the latest news and commentary on the airline industry!

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