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Why supermarkets range

An introduction into why Australian supermarket buyers range new products


This quick blog will help demystify some of the reasons Australian supermarket buyers range new products … and why they don’t. This blog will be most useful for people that have limited experience in dealing with supermarket buyers in Australia.

Many Australian suppliers have pitched their NPD / brands to Australian supermarkets. Sometimes the new products are ranged … sometimes not. The category review result for the supplier is either disappointing / frustrating or exciting.

Consumer / shopper demands

Buyers will initially review their current range to determine whether it is meeting consumer / shopper demands. The review is normally based on scan data and market intelligence. Standard reports, such as ranking reports, are used to evaluate the performance of individual SKUs and brands. This process highlights which SKUs / brands are up for potential deletion. A low sales rate, e.g. UPSPW (units per store per week), is an indicator that the SKU / brand may not meet consumer / shopper demands. Buyers will also use these insights when deciding what new SKUs / brands they may range.

The buyers’ objective is to create a range that meets consumers / shoppers demand to maximise the financial and strategic performance of the category. Financial measures are normally sales, margin and share. Strategic objectives may include tailoring the range to target a specific target market. An example of a strategic objective would be, to offer a full range of fresh herbs to appeal to ‘foodies’.


Buyers, like most employees, have KPIs (key performance indicators) that they are expected to achieve. The KPIs include normal measures (sales, gross margin, share) and can include specific KPIs, such as sourcing new suppliers.

The most common reason why buyers will (or won’t) range your product / brand is whether it helps them achieve their KPIs. Buyers will have a category plan to hit their KPIs and you need to explain how your range will assist them achieve their KPIs. A common mistake suppliers make is to assume the buyer will want their SKUs / brands etc without understanding the buyers category plan.

Growth Potential

Normally ranging decisions are made with historical data. For example, ranking reports are used to highlight the top performing SKUs / brands. In some cases, especially with innovative NPD, buyers will range new SKUs / brands due to the ‘growth potential’. These decisions are normally based on consumer insights. A recent example is retailers ranging more plant-based meat alternatives because they believe sales will increase in the future.

This scenario can be frustrating for suppliers. You may think that your SKU / brand is performing well and is safe from deletion. Unfortunately, your SKU / brand could be deleted to make room for another SKU / brand showing more ‘growth potential’.

Supplier Performance

In addition to the performance of SKUs / brands, buyers also review the overall ‘supplier performance’ when making ranging decisions. Buyers will use a number of different metrics to determine whether the supplier is performing to expectations. Generally speaking, buyers expect suppliers to be category experts that deliver category sales growth via NPD, marketing and retailer promotions i.e. invest in the category. For some categories, e.g. fresh produce, greater emphasis is put on specific metrics, such as DIFOT (delivered in full on time). Depending on your overall supplier performance buyers may (or may not) range your SKUs / brands during a category review process. Simply put, buyers are choosing the right suppliers to partner with, not which SKUs to put on the shelf.  


Some suppliers and retailers have business relationships based on ‘dedication’. Simply put the supplier has decided to give preferential support to the retailer. For example, when supply is tight a fresh produce supplier will supply retailer A, and not retailer B, due to their ‘dedication’ to retailer A. In return the retailer is more likely to range / support that supplier during the category review process.

Generally speaking, dedication is more common for private label suppliers than branded suppliers. So, some ranging decisions are based on the suppliers ‘dedication’ to the retailer. 

Supply risk

Whenever a buyer ranges a product the retailer accepts a level of risk. A major risk is suppliers not delivering the agreed quality and / or quantity of product. Suppliers may not supply for a number of reasons such as:

weather limiting supply of fresh produce SKUs

operational issues, such as a fire at a factory

cashflow / financial issues

To minimise the risk to the retailers’ business, i.e. product not on shelf for customers, buyers need to manage the supply base. So, buyers may (or may not) range your SKUs / brands due to the level of risk in the supply base.  

As a general rule, the larger the $ retail sales in the category, the more suppliers a retailer will have to minimise the risk. Also, for products with historical limited availability, again retailers will normally have more suppliers.

‘Corporate’ plan

Major retailers in Australia, e.g. Aldi, Coles and Woolworths, have corporate plans that are decided by the senior management / leadership team. It is the buyers’ role to implement the plan (even if they personally don’t agree with it). Buyers may (or may not) range your product / brand depending on whether it is meets the ‘corporate’ plan.

An example is that the ‘corporate’ plan is range rationalisation (decrease the total number of SKUs ranged). It is highly unlikely that buyers will range new products during this process. They are more likely just to cut the bottom X% of slow selling SKUs / brands. As reported by SMH (Sept 16) Coles and Woolworths have previously had range rationalisations to decrease their CODB (cost of doing business). Another example is ‘shelf friendly packaging’. To assist store operations the leadership team may decide to only range products that are in shelf friendly packaging. So, if your SKU / range is not in shelf friendly packaging it will not be ranged. 

To maximise the likely success of getting your product ranged suppliers should research what the retailers ‘corporate’ plan is.


This simple blog has highlighted some reasons why supermarket buyers may (or may not) range your SKUs / brand during the category review process. Hopefully these insights have demystified why buyers make the decisions they do …

The information provided in this blog post was general in nature. If you require more information I offer a free initial consultation by completing a contact us form.

Thank you,

Tim Bowen