Retailers Cut SKUs by Up to 25% to Lift Margins as Shoppers Pull Back
Updated
Updated · CNBC · Oct 10
Retailers Cut SKUs by Up to 25% to Lift Margins as Shoppers Pull Back
3 articles · Updated · CNBC · Oct 10
Summary
Dollar General, BJ's, Lululemon and Under Armour said they have cut or plan to cut product assortments, with reductions ranging from 15% to 25% or as many as 1,500 SKUs.
High gas and food prices have weakened consumer spending, while excess choice and markdowns have hurt profitability, pushing retailers to streamline shelves, reduce unwanted inventory and regain pricing power.
The strategy can support sales and margins by shifting demand into fewer items—BJ's said cutting unnecessary choice can raise both sales and margin dollars, and Dollar General said SKU cuts freed space for best sellers.
The trade-off is near-term revenue pressure and customer risk: retailers can lose shoppers to rivals if they remove the wrong products, and investors often resist plans that explicitly accept shrinking sales before recovery.