Retail assortment variation and sales: a cross-category analysis

LayPeng Tan, Jack Cadeaux

Research output: Chapter in Book/Report/Conference proceedingConference proceeding contributionpeer-review

Abstract

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.
Original languageEnglish
Title of host publicationProceedings of ANZMAC 2007 Conference
Subtitle of host publicationreputation, responsibility, relevance
PublisherUniversity of Otago
Pages365-371
Number of pages7
Publication statusPublished - 2007
Externally publishedYes

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