Why Are Companies Limiting Consumer Choices?

By: Anneken Tappe · March 05, 2024 · Reading Time: 2 minutes

Have you noticed stores look emptier lately? That’s not your imagination. Many companies have been trimming their product offerings as they observe the economy, consumer behavior, sustained inflation, and a rise in retail theft.

And it might be a smart business move: Cutting underperforming products, and offering a smaller range can help with supply chain and warehouse logistics. For example, Coca-Cola (KO) recently halved its drink options, discontinuing poor performers like Odwalla juice and Zico coconut water. In retail, Kohl’s (KSS) now releases fewer colors and variations of new apparel. Even automakers like General Motors (GM) and Ford (F) are trimming down the add-ons available for new cars.

While American consumers have continued spending in the face of high inflation, boosting the economy with every purchase, economists, corporations, and investors are worried about when this might change. After all, prices aren’t exactly falling around here.

Some stores are filling the void created by smaller product offerings with affordable private-label essentials, like Target’s (TGT) new private-label Dealworthy line, with all products starting at $10 or less.

Switching to private-label products can provide serious relief for budget-stretched consumers. It appears to be paying off for companies too. Sales of store-owned brands rose 4.7% in 2023, per the Private Label Manufacturers Association.

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