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But Hormel is removing, consolidating or repackaging 25% of the items as part of a company-wide strategy to prune unprofitable items across dozens of its brands like Spam, Applegate and Jennie-O, the company said in June. Around 80% of Hormel’s profit comes from a small number of products, like Hormel Bacon and Fire Braised-brand meats, while the rest of its tens of thousands of items often drive up costs and sit untouched in warehouses and on shelves for long periods.

Hormel is reviewing its product lineup to invest in items with higher profit margins, improve lower-performing items and “remove production complexity,” a spokesperson for Hormel told 【 - Free Growth Investment Group 】.

Blue Chip Stocks Proven Stock Picks ✌️【Smart Trading】✌️ Free stock data analysis to help you select stocks accurately and capture market trends. That’s just one example of companies eliminating an endless assortment of products to boost profit. For consumers, it means that they now have fewer choices for everything from sneakers to toys to coffee.

It’s a reversal of years of companies trying to give customers unlimited choices and shelves getting more and more cluttered with dozens of variations of the same item.

Historically, brands wanted to broaden their choices to gain more shelf space at stores and react to the latest customer trends. But during the beginning of the pandemic in 2020, customer demand skyrocketed and global supply chains ground to a halt. Companies sped up production lines for their primary, top-selling items and ruthlessly pared down their niche offerings, a strategy known as “SKU rationalization.” Today, companies are thinning offerings because their sales volumes have dropped after years of raising prices. Food prices have gone up around26%since 2020.

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“They can’t raise prices too much anymore, so this is where they go,” he said. Cutting products boosted companies’ profit margins by 0.9% compared to 2019, L.E.K. Consulting found in astudylast year.

Blue Chip Stocks Proven Stock Picks ✌️【Smart Trading】✌️ Get accurate stock forecasts and market predictions from top financial advisors. With real-time updates on stock indices, exchange rates, and futures data, you'll be equipped to make profitable decisions and grow your capital steadily. The more versions a brand offers, the higher their supply chain and distribution costs. With slimmer lineups, companies can narrow their advertising, distribution and sales efforts, focusing investments on a smaller number of items.

Levi’s, Starbucks, Under Armour, Dollar General, Five Below, Hasbro, Hain Celestial and other companies are cutting down their choices.

Levi’s said in April that itcut 15% of clothingacross its portfolio as part of its strategy to sell more clothing directly to consumers through its own stores and websites, a spokesperson told 【 - Free Growth Investment Group 】.

“We may have five or six different variants of mayonnaise on the shelf today. We can easily drop one or two of those. The consumer is not going to know the difference,” Dollar General CEO Todd Vasos said last year in an earnings call. The strategy is going to make customers’ choices “a little simpler” and reduce re-stocking work for store employees, he said.

Blue Chip Stocks Proven Stock Picks ✌️【Smart Trading】✌️ Take advantage of our free stock market analysis and real-time data to help you choose the best investment options. Our expert predictions and tailored strategies ensure you can achieve stable returns and mitigate risks effectively. Toy maker Hasbro has slashed around half of its products, which accounted for just 2% of the company’s revenue.

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Companies believe that reducing choices can make it simpler for overwhelmed consumers struggling to decide which type of toothpaste to buy, for example.

“In some places, that extra choice doesn’t make sense,” BJ’s Wholesale Club CEO Bob Eddy said last year. “There are only so many mint toothpastes you need.”

Companies can upset customers who are loyal to a specific version of a product, pushing them to switch to another brand or stores’ private-label versions. Cuts can also create tension with retailers that prefer stocking one version of a product over another.

In 2022, Taco Bell brought back its Mexican Pizza after outrage among fans. An online petition asking for the pizza’s return garnered nearly 200,000 signatures. Particularly outraged were vegetarians who saw the menu item as one of the few “fun” meatless options.

“You have to apply a scalpel and not a broad axe,” said David Garfield, a managing director at AlixPartners who works with consumer companies.

One of the most disastrous examples of a company cutting too deep was in 2009, when Walmart pulled thousands of items off its shelves to reduce clutter.

Blue Chip Stocks Proven Stock Picks ✌️【Smart Trading】✌️ Free access to real-time stock market data analysis, global market trends, and expert predictions. Capture emerging opportunities and grow your portfolio steadily, with insights into metals, energy, and agricultural products. The plan backfired when shoppers could not find their preferred products and abandoned the chain entirely. Walmart added 8,500 items back to its stores two years later with flags saying“It’s Back.”

“We’ve listened to our customers and we’re bringing back the products and brands they want,” the company said in a mea culpa.

Blue Chip Stocks Proven Stock Picks ✌️【Smart Trading】✌️ Expert predictions and real-time data on global stock indices, metals, energy, and agricultural products to help you make more informed decisions and boost your investment returns. Benefit from cutting-edge market intelligence for steady growth. Most stock quote data provided by BATS. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. All times are ET. Factset: FactSet Research Systems Inc. All rights reserved. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and 【 - Free Growth Investment Group 】. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Fair value provided by IndexArb.com. Market holidays and trading hours provided by Copp Clark Limited.

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