This study examines how retail category assortment size affects sales performance. It considers theoretical arguments as well as a body of empirical research that directly or indirectly considers this effect. It then examines this effect in a data set of store range records and POS performance data obtained from an organic grocery retailer in Australia. The results broadly support an argument that categories with wider assortments (greater number of SKUs) will also tend to be categories with higher sales revenue. This relationship exists in both a simple linear model as well as in a more plausible log model and is replicated at two observation dates separated by an interval of five months. Furthermore, an examination of the relationship between changes in category assortments and changes in category sales also supports this finding. Finally, a partitioning of categories into groups undergoing distinct patterns of assortment additions and deletions clearly shows that categories that undergo additions only experience the highest levels of sales increase.
|Title of host publication||Proceedings of ANZMAC 2007 Conference|
|Subtitle of host publication||reputation, responsibility, relevance|
|Publisher||University of Otago|
|Number of pages||7|
|Publication status||Published - 2007|