According to the September issue of Competitive Edge, a monthly newsletter from Barrington, Illinois based consultants Willard Bishop:
“In the past,” the report said, “reducing assortment was not considered an option. However, this is a different retail environment, and reducing store-level assortment will become an increasingly viable option for retailers.”
This has the potential to be great news for Private Brands, which can benefit from the SKU rationalization, they are ideally placed to fill consumer needs in a rationalized assortment. Further they can be created at any level to fill the exact needs of the retail assortment.
Here is the teaser from the Willard Bishop website:
SKU Rat is Coming, Do You Know Where You Stand?
Better holding power on big brands. Fewer out-of-stocks and lost sales. Sections that are easier to shop. Fewer unsaleables and returns. Less store labor and more than $100,000 per store in freed-up capital. These are the key benefits of getting assortment right and eliminating a large amount of duplication and underperforming sections in our stores. Retailers who continue to struggle in this current economic climate and other leading chains who are looking to put some distance between themselves and their competitors see an opportunity to do a better job with rationalizing assortment to improve their current financial position.
This issue of Competitive Edge looks at the SKU rationalization movement and how this is likely to impact retailers, suppliers, and categories.