The Delisting: Confectionery ranges trimmed by under pressure UK supermarkets, says IRI

Candy castaway: Big UK retailers simplify ranges to compete with discounters

Major UK supermarkets are trimming the number of confectionery SKUs as competition from discounters forces them to simplify ranges, according to research by IRI.

Fruit sugar confectionery lines were cut by 15% for the four weeks from 12 September 2015 compared to last year and chocolate confectionery ranges were clipped by 7%.

All products category ranges within UK supermarkets from food to household items dropped 4.9% over this period, IRI’s analysis found.

Discounter competition

“What’s happened is the major supermarkets have hit a crisis,” Martin Wood, head of strategic insight – retail at IRI UK, told ConfectioneryNews.

“The discounters have increased their market share and they’ve really hit big supermarkets. The convenience stores have also upped their game and you also have more internet purchases.”

He said big UK supermarkets had chosen to simplify ranges to remain competitive.

Tesco and Morrisons simplify

Wood said Morrisons and Tesco were leading the charge in cutting SKUs. In January this year Tesco said it would cut the range of products in its supermarkets by 30%.

“People are sometimes happier with a simplified offer without having to make many decisions,” said Wood.

He said that large confectionery assortments were particularly badly affected due to the proliferation of stand-up pouches on the market, which require a larger shelf-space.

In many cases retailers are reducing pack size options for confectionery products, said Wood.

Bad news for smaller players?

The analyst said that while manufacturers were wise to have as much stock and SKUs as possible, they could work with retail customers for recommendations to cut their portfolio.

He added that the big UK supermarkets were keen to follow the discount retailer model and limit their supplier base, which could mean smaller confectioners lose out.

IRI’s research was limited to the UK market, but Wood warned discounters were gaining market share globally. However, he said the top four UK supermarkets commanded a large market share, so the effects could be more pronounced than in other developed markets.

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