Walmart Reverses Course on SKU Rationalization
A RetailWire poll in June of last year found respondents
split on the value of SKU rationalization efforts. Forty-two percent stated
that efforts undertaken by retailers were somewhat (26 percent) or very unsuccessful
(16 percent). Forty-one percent thought SKU rationalization had been somewhat
(39 percent) or very successful (two percent). Eighteen percent said the book
was still out.
Perhaps the most high-profile SKU rationalization program took
place at Walmart as part of the company’s Project Impact that sought to clean
up the chain’s shopping environment. A subsequent dip in sales resulted in
numerous executive and operational changes, including the announcement yesterday
that Walmart was adding 8,500 SKUs to its mix.
Walmart plans to add an average
of 11 percent more products to the average store. Shelf tags announcing “It’s
Back” will accompany
products that had been delisted and subsequently brought back.
“We’ve listened to our customers and we’re bringing back
the products and brands they want,” Duncan Mac Naughton, chief merchandising
officer, Walmart U.S., said in a press release. “Customers have already
seen a wider selection of products on our shelves and we’ll continue
to bring back great products at great prices.”
Another RetailWire poll
conducted last month found that SKU rationalization efforts need to look beyond
simple sales numbers to succeed. Consumer loyalty for a particular product
was listed as the element most critical (33 percent) to determine before cutting
- Walmart Reinforces its Commitment to Deliver Low Prices. Every Day. On Everything.
- Wal-Mart Brings Back 8,500 Products in Bid to End U.S. Slump – Bloomberg
- Wal-Mart Merchandise Goes Back to Basics – The Wall Street Journal
Discussion Questions: Does Walmart’s reintroduction of thousands of previously delisted products make it more likely that others will alter their own SKU rationalization efforts? What lessons do you think can be learned from the Walmart experience?