Why no SKUs is good news : Private label marches on

Private label news: The FT had a rather interesting take on the SKU-editing trend. Responding to the revelation that Unilever is to cut 40% of its range, the article maintains that the manufacturers’ “trend towards less complexity is helped by the support of retailers, which are eager to clear more shelf space for their own-label products”. Meanwhile, Kraft and P&G say they have no intention of scaling back ranges.

Comment: “Helped by the support of retailers” is an interesting way of putting it. In truth, retailers’ SKU-delisting exercises and the rise of private label are forcing manufacturers to reconsider their ranges. But smart companies are turning the situation into something positive. Unilever is using the exercise to cut costs across its supply chain and leverage scale: the leanness will serve the company well. It’s a sensible and businesslike response to increased private label activity, as is increased collaboration with retailers over NPD. There is consensus that consumers will not abandon their “hero brands” for private label, but the endless flankers are helping no one, least of all the consumer. The cult of “new” is so ingrained in brand marketing strategy, however, that I doubt many manufacturers are ready to abandon it. Wall Street’s demand for growth is so insistent that it must seem so much easier just to add variants than work out how to get genuine organic growth from existing products. Such innovation is all very well, but if you can’t sell it in …

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