From BJ’s to Lululemon, retailers are trimming assortments
Major retailers like Under Armour, Lululemon, and BJ's Wholesale Club are reducing their stock keeping units (SKUs) to improve profitability and manage inventory. This strategy aims to avoid excessive discounting, though it may limit consumer product variety.
Why it matters
Retailers are shifting focus from volume-based growth to operational efficiency as consumer spending habits tighten due to inflation.
Retailers are trimming assortments in an effort to clean up their balance sheets.
As shoppers cut spending in the face of high gas and food prices, businesses have pulled more levers to boost profitability and appease investors. During earnings calls this year, a range of retailers have highlighted efforts to reduce the number of items they sell, commonly tracked as stock keeping units, or SKUs.
In March, Dollar General said it trimmed 1,500 SKUs. In August, Under Armour said it shrunk SKUs by 25% over the past few years and plans to cut another 25%, while BJ's Wholesale Club said it plans to reduce roughly 20% of SKUs . In September, Lululemon said it cut North America SKUs by 15%.
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