Brand and stock-keeping-unit (SKU) assortments, assortment changes and category sales

Abstract

This study examines how brand and stock-keeping-unit (SKU) assortments affect category sales across a large number of categories over two time periods in which brand and/or SKU assortments were changed in two retail outlets. It uses store range records and sales data from a retailer who primarily added or deleted entire brands in one outlet and primarily added or deleted SKUs within brands in a secondoutlet. Categories with a greater number of SKUs achieved relatively higher sales revenue. Categories which increased assortments also increased sales. A partitioning of categories into groups undergoing distinct patterns of assortment additions and deletions reveals that categories that underwent additions only, especially brand additions, experienced the highest levels of sales increase.