Less is more?

If you’ve noticed your favorite stores are feeling a bit emptier lately, you’re not tripping—it’s a major business move. To stop bleeding cash and get investors back on their side, retailers are going hard on "SKU rationalization." In plain English? They are slashing the number of items they sell to clean up their balance sheets.

It’s giving major damage control. With shoppers tightening their wallets due to inflation, companies are cutting down on variety to avoid getting stuck with piles of unsold inventory that eventually need to be discounted. Nobody wants to be the brand that has to mark everything down just to get it out the door.

Who is making the cuts?

Some big players are already deep into this strategy:

  • Lululemon: Recently cut their North American SKUs by 15%.
  • Under Armour: Shrunk their offerings by 25% over the last few years and plans to axe another 25% soon.
  • Dollar General: Has trimmed roughly 1,500 SKUs to focus on their best-sellers.
  • BJ’s Wholesale Club: Planning to cut about 20% of their product variety.

Under Armour CEO Kevin Plank noted on an earnings call that the goal is "fewer products with greater purpose." The logic is that by selling less stuff, they can focus on higher-margin items and stop relying on those pesky clearance sales that kill profitability.

The risks of shrinking

It’s not all Ws for these companies. According to Guggenheim Securities senior retail analyst Simeon Siegel, there’s a delicate balance. If a company gets too big, they can start to lose their "cool" factor and cheapen the brand. But if they cut too much, they risk losing customers to competitors who still carry those specific items.

BJ’s CEO Robert Eddy admitted that past attempts to cut products backfired, leading to lower sales. They are now trying to be smarter about it—like ditching the 1-liter soda bottles when they already have cans and 2-liters on deck.

Why it matters

Real talk: this strategy is about corporate survival. For you, it means the era of endless choices might be coming to an end. Retailers are betting that by offering a more curated selection, they can push you to buy what's actually on the shelf at full price. If it works, their margins go up, but your shopping experience lowkey gets a lot less customizable.