Your range review is a margin decision in disguise
The range review arrives on the calendar and the objective sets itself. Hold the listings. Defend the facings. Don't come out of the room with less than you went in with.
It is an understandable instinct and a costly frame. A range review is one of the few moments in the year when the shape of your portfolio is genuinely up for negotiation, which makes it a margin decision. Defending the status quo is only the right answer if the status quo is optimal.
It usually isn't.
What the defensive frame costs you
When the goal is holding facings, three things follow.
You argue on the retailer's terms. Category size, rate of sale and share of shelf are their metrics, and they are metrics about volume. Nothing in that conversation asks what each line contributes to your margin.
You defend your weakest lines hardest. The SKUs most at risk are usually the slow movers, and the slow movers are often the ones you would drop yourself if the decision were entirely yours. Energy goes into keeping the things you should be arguing to replace.
And you arrive without a proposal. If your only position is no changes, the retailer's plan is the only plan in the room.
The analysis to run first
The alternative is to walk in with a view on what the range should be, argued on value. That means knowing where value is actually created in your portfolio, which is a different question from where volume is.
For each SKU, you want:
- Margin contribution rather than revenue, calculated after trade investment.
- Rate of sale against space consumed, so the comparison is like for like.
- Incrementality. Does this line bring volume the rest of the range wouldn't otherwise get, or does it split demand with the SKU beside it?
- Role. Some lines exist to anchor price perception, some to hold a shelf position, some to earn. A line doing its job badly is a different problem from a line with no job at all.
The output is a ranking, and the ranking usually contains at least one uncomfortable finding: a long-standing SKU that consumes space, splits demand with a better line, and contributes very little once trade spend is allocated properly.
Turning the analysis into a position
The productive version of a range review is a trade. You propose delisting the lines that don't earn their space, and use the freed facings for the ones that do, or for a new line you want listed.
This works because it gives the retailer something they want. They are also trying to improve the productivity of the space. They simply have no visibility of your margin structure, so they optimise on category metrics instead. A proposal that improves rate of sale per facing is one they can accept.
It also changes what happens when they push back. If they want to delist a SKU you have identified as strategically important, you have the evidence to argue for that one specifically, instead of spending credibility defending everything equally.
The one to three percent
Portfolio and mix work rarely produces a single dramatic number. It produces a series of small, deliberate decisions about which lines go, which packs get the facing, and which channels get an exclusive format. Over a year they compound into a bottom-line improvement.
That is the part worth planning for. The range review is where those decisions get made whether or not you have prepared for it.
Northform works with New Zealand FMCG suppliers on portfolio and mix analysis ahead of range reviews. Schedule an assessment.