- I have heard over and over again how difficult change is. But what does that really mean? In this article, I will discuss my view on how change relates to SKU proliferation and SKU assortment on the shelves within grocery stores across the U.S.
We are all familiar with how Covid has affected supply chains, transportation networks, warehouse and port backlogs, access to quality manpower, etc… But, the one ripple effect of Covid (If am a CPG manufacturer) that should be concerning me is how retailers will be looking at their assortments over the next couple of months, heading into fall selling season, and assortment decisions headed into 2023.
Typically category managers would focus on having enough of an assortment to ensure all of the consumer’s wants and needs are represented on the shelf. However, what retailers have figured out over the last two years of pandemic shopping, is consumers aren’t really phased by limited assortments. Sales are up, foot traffic is up, and profits are at record levels for most large-format grocers. Hence the biggest questions category managers will ask themselves heading into next year will be around sku assortment and rationalization.
While all categories across center store will likely see changes, sizes, flavors, and similar items with minimal differentiation points are obvious items that will be in CM’s crosshairs.
In a recent interview with an anonymous Beverage Category Manager, we spoke specifically about his water category. What he was working through was how much space and how many upc’s he would be dedicating to still water. “Spring Water Vs Revere Osmosis Water How many sizes do I need for each”? “Can cover my sales on both these iterations with a private label offering especially if the economy is headed into recession”? “Do I bring in new items across more premium water offerings”. How do I fit in the whole sustainability piece with a true recyclable option, especially as more and more negative press hits PET single-use plastic”?
Think about all the items and categories that are sitting on grocers’ shelves. Now think about how much repetition there is across brands and sizes…. Home cleaning supplies, paper goods, HBA items, beverages, canned goods, salad dressings, cereal…. I can go on and on.
The next few months will be very telling… Let’s see which brands and brand reps come out on top!