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Doug Stephens's RetailWire Blog
February 11, 2010
Brands Hit By Wal-Mart's SKU Reductions
FROM RETAILWIRE:
It's tough losing your biggest customer and many brands today are finding that out firsthand as Wal-Mart Stores is aggressively pursuing SKU reduction in its stores. What are the implications for manufacturers in light of significant delisting activity by Wal-Mart and others around the country?
MY COMMENTARY:
Suppliers in many categories better brace themselves. The SKU reduction by Wal-Mart is not a temporary measure. It is not simply a recessionary response but rather a reaction to the profound, long-term insight that they are selling into a shrinking market and they're not alone. Any mass retailer who has relied on baby boomers to stoke their sales over the last twenty years is in the same boat. The generation is downsizing and there's no other consumer group large enough to replace them...not yet anyway. A fascinating article by my friend Ken Gronbach, author of The Age Curve, predicts a very tough future for our friends at Walmart. I think it holds many of the answers to the discussion question posed. |
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