Retail Case Study

Background
Our client is an established leading premium retailer with over 30 branches. Since 2020, they were facing issues with their baking categories: sales were down, the assortment was increasing, and so was the stock.  

Challenges
Our client had a good understanding of the cause of its challenges. They knew that the assortment had to be rationalized to propose a better commercial offering to their shoppers. However, they were facing limitations from their ERP: getting the data right to build the supporting analyses was just not possible.

Solution
The first thing that we did was to identify champion items by subcategory and ensure they were present in every branch. Simultaneously, we had to maintain allocated space, range consistency and assortment size.
For each branch, where champion items were added, we also identified all the items that needed to be removed without altering the commercial proposition.
At the same time, we helped them embed this optimization process so it was not a one-time event and could be easily replicated by their own teams.

What the Retailer team did
Merchandise and operations teams did excellent execution work: champion items distribution was optimized quickly, while items to be removed were cleared or returned to suppliers in a very short time.

Results achieved
After 2 months, the baking category was showing the following improvements:
  • Sales Growth +41%
  • Margin Value Growth +54%
  • Margin Rate +9.9 points
  • Inventory -24%
  • Assortment -5%
  • Champion Item Distribution +16%