The North American Retail Division sells office products, copy and print services and other business-related services under the Office Depot and the Office Place brands through a chain of high-volume office supply stores in the United States and Canada. As of the end of 2001, the North American Retail Division operated 859 office supply stores in 44 states, the District of Columbia, and Canada. In 2002, Office Depot plans to add 25 to 30 new retail stores. Over the next few years, the company plans to continue this approach to retail store expansion, with an emphasis on market density in order to leverage advertisin

While sales decreased in 2001, gross profit as a percent of sales increased. Sales shifted away from lower-margin computer hardware, software, and office furniture and into products such as machine and office supplies, as well as additional copy center services. Sales of computer products declined 26% in 2001 compared with an increase of 3% in 2000. During 1999, Office Depot offered low priced units and more aggressive promotional programs on computer products, which resulted in strong sales for that year and lower margin percentages. The sale of business furniture declined 16% in 2001, after a 14% increase in 2000. The decrease in 2001 is consistent with the slowing economy and decisions to cancel or defer office-related purchases. The sale of business machines and supplies increased in both periods.

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