Ben Sprecher

Chains Continue to Rationalize SKUs

June 16, 2010

FROM RETAILWIRE:
Despite some evidence that consumers do not take kindly to having their favorite brands taken off the shelf, more than 40 percent of retailers plan to cut SKUs this year, according to Nielsen. Do you think that SKU rationalization efforts at retail in recent years have been successful or have they gone too far?      [more...]

Some great comments here, but everyone's missing one key question: *who* is buying the items in question?

To be overly simplistic about it, if deciding between dropping item A or B, the item that matters most to the shoppers who matter most to your store is the one you should keep.

We worked with a retailer that had an ultra-premium olive oil that was one of the slowest moving SKUs in the store. However, all of the shoppers who purchased that oil were in the top 2% of spenders in the store. Without that knowledge, the retailer would have happily eliminated the item for one that moved somewhat more units, and would have given the most important shoppers in their store a reason to take some business elsewhere.