It's been a rough year for Staples (Nasdaq: SPLS), Office Depot (NYSE: ODP), and Office Max (NYSE: OMX) ... but don't kid yourself, investor. It's about to get a whole lot rougher.

Over the past 12 months, shares of Staples have lost nearly 10% of their value as the market surged 21%. Office Depot has done even worse, down 31%, while Office Max has performed worst of all -- 48% of its market cap vaporized in just one year's time. So what does Wal-Mart (NYSE: WMT) go and do, seeing all these retailers down so much? It kicks 'em.

Last summer, Wal-Mart launched an August blitzkrieg against the office supply retailers. It placed full-page advertisements in some markets giving side-by-side pricing comparisons of "back-to-school" supplies it was selling, versus the same products sold by Office Depot. The upshot: Shopping Wal-Mart, and shunning Office-D, would save shoppers 45% off their kids' school costs.

It seems the ad campaign worked, because now Wal-Mart's ready to take the next step. According to a report in Stock Market Insider last week, the Bentonville Behemoth has drafted "contingency plans" for a massive invasion of the retail office supply market, going head to head with not just Office Depot, but Office Max and Staples as well.

Foolish takeaway
Office Max is already struggling with 1.8% operating profit margins, versus Wal-Mart's 6%, and Office Depot barely keeps head above water at 0.2%. Given the disparities, Wal-Mart's fully capable of undercutting both retailers on price, remaining solvent itself, but perhaps killing its rivals entirely. Only Staples, with its 6.5% margin, looks likely to survive this onslaught. Investor beware.