Big G To Rationalize Skus

Discussion
Jul 02, 2004
George Anderson

By George Anderson


As a retailer once told us, the average manufacturer’s idea of sku rationalization is to explain why a store should open up space for three new items after it has stopped making
one.


Whether that will be the case with General Mills remains to be seen, but the giant food manufacturer announced earlier this week it planned to eliminate 20 percent of the company’s
product line.


This does not signal an end to new product rollouts, said the company’s chief executive, Steve Sanger.


“I feel very good about the innovation line-up we have coming in 2005,” he said. “Some of the innovations really do address major [consumer] needs in a meaningful way.”


Mr. Sanger was especially confident about the company’s new ready-to-eat cereals with less sugar. (See RetailWire,
06/25/04, Big G Cuts Sugar, Adds Splenda To Cereals
)


“The quality of the low-sugar cereals is far superior to anything we have done before,” he said. “I think we know there is a large segment of consumers who want sugar options
for their kids. These kids like the sweet taste of a Cinnamon Toast Crunch. We give them both the sweet taste and the low-sugar profile.”


Moderator’s Comment: How effective are manufacturers and retailers at sku rationalization? What are the keys to achieving
optimum shelf sets?


As one person who made the switch from a retailer’s headquarters to work for a CPG company once told us when we asked why so much space was devoted to numerous
versions of essentially the same product produced by different vendors, “You can rationalize a lot of space if you’re getting paid enough for it. We’re in the real estate business
here.”

George Anderson – Moderator


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