Giant-Carlisle Describes SKU Rationalization Effort

MICHAEL GARRY

CARLISLE, Pa. — Giant Food Stores here, a division of Ahold USA, has reported on a SKU rationalization effort initiated last year with 20 categories, and divulged results for three of those categories.

The categories included those, such as frozen vegetables and cooked chickens, that have experienced growth as shoppers turned to meal preparation during the recession, said Dan Glei, senior vice president, grocery, for Giant Food Stores, who described Giant’s SKU rationalization process at a workshop at the Food Marketing Institute Show earlier this month.

In frozen vegetables, SKU count was cut from 217 to 188, a 13% drop; the category’s profits, unit sales and shopper count went up, while dollar sales were flat.

Prior to the change, Giant had found that “on many weekends, we just couldn’t hold the space between stock-ups because the items were so productive,” he said. “This is a category that a lot of consumers are trying to get into, and we shifted the mix towards the value consumers are looking for.”

In the shelf-stable juices category, the SKU count dropped from 260 to 256. While unit sales were up slightly, profits, dollar sales and the number of shoppers fell. These results correlated with Nielsen panel data indicating that juices are a challenging category.

“The sugar content is making juices a less attractive choice for many parents,” said Glei. “There’s a consumer issue that we’re challenging our supplier partners to dig into.”

SKUs in the fully-cooked chicken category were trimmed from 69 to 63, resulting in gains in profits, dollar and unit sales and shopper count. “This is a category consumers are embracing,” Glei said.

In conducting category reviews, Giant used “a very straightforward set of processes” and went through each of the 20 categories in 26 hours on average, said Glei.

Giant operates 179 stores under the Giant Food Stores and Martin’s Food Markets banners.

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