It is expensive to rationalise SKU (products) in any retailer; the markdown has to be factored in at the margin, traders don't like it as they have to take a hit.

Asda committed the usual cardinal sin when faced with falling sales, alongside an avalanche of retail media, they added more range for various reasons. No doubt back margin was part of it, plus traders trying to grow sales in a retailer that's struggling is never an easy task.

Which means short cuts can become very palatable.

I am not going to talk about all of the short cuts that we know happen in a distressed retailer, labour cuts, back margin, more range, more media.

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Less focus on volume, more guaranteed "savings" and a faltering sales line to boot means the end game is always the same.

Like in horror movies where the character keeps going in to that room, despite you pleading that they don't, they keep going in!

A major giveaway for evidence of SKU rationalisation is the labels, that are red (IE not a corporate template in Green) and have bigger cuts than the core pricing. Often these will be half price, or greater.

Driving the sales to get rid of these products that are not part of the range for this store, or group of stores, as it may be.

The challenge with this rationalisation is that the costs are high, this is "good"stock sold at standard pricing. Especially in the case of health & beauty, it'll be higher margin but also higher in price.

Household (IE laundry etc) are the same, whereas some of the packaged goods may sell with a shallower price cut as customers buy these anyway.

So to sell lines off at around half price, to clear through is right in this case but the markdown impact is significant across the estate.

Again, as discussed; there is no other way out of the trouble Asda find themselves in, other than the plan they are currently executing on.

Of course - once these labels are removed, there's more space for the lines that remain in the range, and this means better availability without colleagues having to fill in day.

This simplification is vital, and will be an ongoing feast for the central teams, driving more volume without in day replenishment is 100% the aim of the game.

It means you can sell more by being available, without spending on labour to ensure that availability remains in the trading day.

Sometimes you have to fill in day, and that's fine. But with the current Asda set up, there's too much range, by definition too much overstock and that becomes difficult to drive any volume.

Whilst this visit was to a Supermarket (Asda's smaller format), it's clear that the excess in this store is plentiful too. The warehouse on the shop floor (capping shelves) means that you can see just how heavy some stores are.

Whilst I applaud the mentality to drive more stock in to stores; especially as they kick off the turnaround, this is expensive, both in terms of working capital, stock turn and colleague labour to keep checking the shelves and working out what will go out.

It's early days - so not a concern yet, but there must be a drive to get the right stock in to stores, not just a bit of everything so availability is protected.

Right stock, right place, right time should be the cornerstone.

Not all overs on the top shelves is/are bad. Sometimes you need stock of lines that are faster moving and may sell out in day, and you'd not look to give it more space in any case.

There are always examples like that. That is "good" overstock.

Bad overstock are lines that sit on the top and are slower movers, sometimes sent in for a rollback that hasn't worked, or for shippers or other additional space that hasn't performed.

It's all to be worked through of course.

All eyes remain on Asda but whilst the results are poor (recent accounts were poor) there is a plan and all eyes on the execution of that plan.

Given their work on Asda price, it's different enough in the market versus other rivals that it may just work. But it will take time, they're deflating by establishing the price gap and volume is the key play here.

Softer comps are easier to trade against and Kantar looks hopeful in the interim, but the range rationalisation can't come quickly enough.

You always upset someone with a range rationalisation, as every product sells at some sales rate or other. The trick is maintaining choice and breadth of range without crucifying your own operation.

Remember - the aim is to sell more by being always available and without spending labour on replenishment to ensure that availability remains in the trading day.

It's a tough job, but Asda have to do it.

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