Every SKU promises choice. It also requires registration, forecasting, space, capital, receiving, replenishment, pricing, inventory, and a customer decision. When it doesn't fulfill a role, variety ceases to be a service and becomes a cost.
The Problem Behind the Number
Cutting based on the ABC curve alone is as dangerous as accumulating items. Low-selling products might complete a shopping mission, protect the brand image, serve a profitable niche, or sustain perceived variety. The problem isn't selling little; it's existing without a measurable function.
THE NUMBER THAT MATTERS
- The majority of products on Brazilian shelves contributed less than 2% of their category's sales. Source: NielsenIQ/Valor Econômico, 2021.
- An optimization study cited by NielsenIQ links a 10% reduction in assortment to an average gain of 7% in sales and gross margin. Source: NielsenIQ/SA+, 2026.
The numbers above are not interchangeable: each source works with its own period, panel, and methodology. They serve as converging or contrasting signals, not as a single statistical series.
Proven Fact, Observed Trend, and Hypothesis
Proven facts. These are the data attributed to the indicated sources and years. They describe the samples and periods studied.
Observed trend. A combined reading points to a change in basket composition, greater pressure on productivity, and the need to manage price, volume, mix, and availability separately. A trend is not destiny: format, region, and audience can behave differently.
Author's hypothesis. My hypothesis is that an excessive assortment often compensates for a lack of commercial decision-making. Adding items is politically easy; removing them requires a thesis, data, and conversations with suppliers. This is why complexity grows silently.
Impact on Operations
IMPACT ON OPERATIONS
Every change in consumption ends in concrete decisions about purchasing, inventory, pricing, planograms, scale, production, supply, and service. If a metric doesn't impact these routines, it hasn't yet become management.
- Define the role of each SKU: destination, routine, margin, image, niche, or innovation.
- Analyze demand transfer before delisting an item.
- Measure productivity per centimeter, per dollar of capital, and per operational hour.
- Review duplications in value proposition, price, size, and brand.
Opportunities for Operators
A lean and intelligent assortment increases availability and legibility. The review should be done by store cluster and shopping mission, with a controlled test, a sufficient time period, and metrics for the category's total sales—not just the performance of the removed item.
Implementation should start small: select comparable stores, define a hypothesis, establish a baseline, test for a sufficient period, and measure the total effect—including transfers between items, loss, availability, and additional labor. Scaling without this framework turns opinion into cost.
WHAT I WOULD TRACK
Revenue, volume, units per transaction, frequency, contribution margin after losses, availability of critical items, and operational productivity. The priority changes by topic, but none of these indicators should be read in isolation.
Questions for Managers
A QUESTION FOR THE MANAGER
- What function does each item fulfill beyond just 'being available'?
- How much capital is tied up in redundant value propositions?
- Does delisting an item transfer the sale or does it drive the shopping mission out of the store?
Conclusion
The transformation of food retail doesn't just happen in strategic presentations. It shows up on the loading dock, in the stockroom, on the shelf, in the price, in the checkout line, and in the shopping cart. The role of leadership is to distinguish noise from structural change and to convert insights into operational routines.
Sources Consulted
- The majority of products on Brazilian shelves contributed less than 2% of their category's sales. Source: NielsenIQ/Valor Econômico, 2021.
- An optimization study cited by NielsenIQ links a 10% reduction in assortment to an average gain of 7% in sales and gross margin. Source: NielsenIQ/SA+, 2026.
Continue This Discussion
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About the Author
Kesler Soares Pereira
Operations and Commercial Management Executive | Psychoanalyst | Human Development
An executive with experience in food retail, cash-and-carry, operations, commercial management, and people management. His perspective combines store routines, metric-driven discipline, and human behavior to turn consumer signals into business decisions.