Episode 41
Does Your Retail Business Have Range Creep: Retail's 'Stock Illusion' (Pt2)
Hi, I'm Clare Bailey, The Retail Champion.
In Part 1 of the Stock Illusion series, we explored the customer-facing cost of over-ranging — the overwhelm, the choice paralysis, the damage to the shopping experience. Now it's time to go deeper.
In this episode, I'm looking at the operational reality of range creep — how it happens, why it feels like good management when it's actually slowly destroying your margins, and what data-driven decisions really look like when you're editing a range.
Because here's the truth: most businesses don't suddenly wake up with bloated ranges. It creeps in. A new line because a category's doing well. Another colourway because the grey one sells. A supplier introducing something low-risk. And before long, the range is running the business — not the other way around.
What We Cover
• Why range creep feels like good management until it really doesn't
• The difference between sales performance and margin performance — and why it matters
• Why retailers develop emotional attachments to products that are quietly killing their profitability
• Product lifecycle management: every product has a beginning and an end
• How exception reporting helps you catch decline before it's too late
• Why e-commerce has made range discipline harder, not easier
• What the best retailers do differently — continuous curation, not annual reviews
• Why clarity gives control: and how a curated range is better commercially and operationally
• A sneak preview of what's coming in Part Three
Key Takeaways
• Adding is easy. Editing is where the hard — and most valuable — work happens
• Your top seller by sales volume might not be your most profitable product
• Products don't get culled because of emotion — and that's costing you money
• Good retail doesn't run on nostalgia. It runs on relevancy
• The strongest retailers make as many quality exit decisions as entry decisions
Resources & Links
• Free Stock Assessment & Mini Guide: retailchampion.co.uk/retail-playbooks
• The Retail Champion: www.retailchampion.co.uk
• Other episodes: retailreckoningpodcast.co.uk
• Newsletter: retailreckoningpodcast.co.uk/newsletter
Subscribe to Retail Reckoning wherever you get your podcasts.
Connect & Share
If this episode resonated — and if you recognised your own business in any of it — I'd love to hear from you. Leave a review, share it with a fellow retailer, or come and find me on social media. Let's keep the conversation going.
Transcript
Do you have range creep?
Speaker:Have you lost control without even noticing?
Speaker:Are you over-ranged with low margins, have to discount, a
Speaker:mountain of stock in the stockroom?
Speaker:And this is the case of many perfectly good retail businesses, and this is
Speaker:part two of the Stock Illusion series.
Speaker:I'm Clare Bailey.
Speaker:This is Retail Reckoning, and welcome back.
Speaker:In part one, we talked about something that a lot of retailers are feeling right
Speaker:now, and that's the fact that businesses don't necessarily have a demand problem.
Speaker:They've got a decision-making problem.
Speaker:They've got too much stock, too many products overlap each other,
Speaker:cannibalize sales, too much complexity, and that's all sitting underneath an
Speaker:actual sensible customer experience.
Speaker:We're overwhelming people.
Speaker:But I want to move away from the customer side of the conversation that
Speaker:we focused on in part one and look at something a lot more operational, where
Speaker:it's about data, decision-making, and everything that creates great ranging and
Speaker:a curated range that people wanna buy.
Speaker:I don't think businesses suddenly wake up one morning with bloated
Speaker:ranges or duplicated stock, messy categories, warehouses full of
Speaker:products that nobody's going to buy.
Speaker:I actually think that the situation gets built so slowly,
Speaker:and that's what makes it dangerous.
Speaker:That's why I called it range creep.
Speaker:It isn't feeling like bad management while it's happening.
Speaker:Usually, it feels like good management, and that's where we fall into the trap.
Speaker:You might add a new line because the category's performing well, and it,
Speaker:that seems like a good idea at the time.
Speaker:Or a supplier, they introduce another product and they show it to you and
Speaker:you think, "Oh, that's quite low risk. Let's test it." Okay, fair enough.
Speaker:And then you get a best seller, and it gets duplicated by the supplier
Speaker:into another color or another finish.
Speaker:And we say to ourselves something like, "If the gray one sells, surely
Speaker:the navy one will too." That doesn't feel particularly bad decision-making.
Speaker:It doesn't feel reckless.
Speaker:It just feels like steady expansion.
Speaker:And that's the issue, that most businesses rarely notice this is happening until
Speaker:suddenly the range has become so big, so heavy, so more operationally complicated,
Speaker:and it's not what anyone ever intended
Speaker:But here's the important bit.
Speaker:Most businesses did not actually grow their range strategically.
Speaker:It's very much more reactive, and that really matters because
Speaker:reactive buying creates almost, call it an addictive culture.
Speaker:You feel like if something is selling well, we have more versions,
Speaker:we have another colorway, we have some more sizes, or a competitor
Speaker:launches something, and therefore we've got to match it, haven't we?
Speaker:Well, actually, have we?
Speaker:And then you've got the suppliers.
Speaker:They're pushing another range, and we take it just in case 'cause we
Speaker:don't wanna left, get left behind.
Speaker:We don't want the competition to steal the march, and so
Speaker:you just keep adding products.
Speaker:And without anyone consciously really thinking about it, the default setting
Speaker:inside the business is to buy more stuff.
Speaker:Because adding is the easy bit.
Speaker:I mean, obviously, apart from the cash flow implications.
Speaker:Editing is where it gets hard The adding feels, I guess, sort of optimistic,
Speaker:like you're being proactive, like you're giving customers choice.
Speaker:But removing products can feel painful, and it feels more uncommercial in a way.
Speaker:And the editing forces those difficult decisions, which should be data-driven.
Speaker:Editing a range, you look at your top and bottom sellers by sales value, and you
Speaker:clap your hands and say, "I'm doing really well." But if you look at them by margin
Speaker:value, it might be a very different story.
Speaker:I remember working with a pet shop retailer who thought their fastest-selling
Speaker:item, 'cause it was if you just looked at sales, was a salmon-based product.
Speaker:And in fact, it wasn't that at all.
Speaker:It was a chicken-based product.
Speaker:when you, when you start discovering the information in your business and
Speaker:analyzing the range on the data and making data-driven decisions, which
Speaker:is kind of my geeking out moment where everything has to be based on the data,
Speaker:and you have to ask yourself, "But why?"
Speaker:also, it's more important to make sure that you're picking the products that
Speaker:stay on the range that not only deliver sales and satisfy customers' needs, yes,
Speaker:of course, that brings footfall, that brings basket size and repeat business,
Speaker:but it's also about does the data tell you that that's actually making you any money?
Speaker:Is it hitting you in the pocket or not?
Speaker:And that's what forces those difficult decisions because you have
Speaker:to make a decision between, let's say, the salmon or the chicken.
Speaker:Well, if the person that buys the salmon, if you look at receipt level
Speaker:data, is also buying lots of other things, so their total basket value
Speaker:is really high, then great, keep it.
Speaker:If it isn't, if it's just a vanity product that gives you a high sales
Speaker:line and a low margin, that's when the decision has to be culled.
Speaker:And this is why products don't get culled, because it can become emotional.
Speaker:You say, "Well, it's my top seller. If I take that off the range, what
Speaker:will people buy?" well, actually, if you haven't got salmon, they'll
Speaker:probably buy chicken anyway.
Speaker:So that's why it becomes emotionally protected, and it constantly happens.
Speaker:So many retailers I know develop these sort of emotional attachments
Speaker:to products because it's something they like, or they like the supplier,
Speaker:or they've got a fondness for the category, or, what else could it be?
Speaker:A historic best seller.
Speaker:there's products sitting in ranges that probably shouldn't be, and they're only
Speaker:surviving the cull because somebody's thinking, "Well, it used to be really
Speaker:good," or " We've always sold that," or, "People might like it again in future.
Speaker:I don't want to get rid of it." Yeah, great.
Speaker:Maybe.
Speaker:But good retail doesn't run on nostalgia, it runs on relevancy,
Speaker:and that changes over time.
Speaker:It expires.
Speaker:Customers' needs and wants change.
Speaker:Our tastes and preferences change.
Speaker:We get told we used to think something was good for us and it isn't anymore,
Speaker:or colors or fashion or whatever.
Speaker:It, across all sectors and this is one of the biggest operational issues that
Speaker:retailers struggle with because Of course, every product on your range, you
Speaker:brought it into the business for a reason.
Speaker:But what if the reason's expired?
Speaker:don't you ask yourself, "Does the reason that I brought this in still exist?" And
Speaker:that's where we have to revert to things like product life cycle management.
Speaker:We've got a playbook on that actually at retailchampion.co.uk/retail-playbooks.
Speaker:Um, we also think about products are very good at launch, and I
Speaker:mean, everybody loves a good launch.
Speaker:We've got a whole new season coming out.
Speaker:We're gonna do launch meetings, press releases, plans, merchandising, all these
Speaker:marketing campaigns, and everyone gets really, really excited about the newness.
Speaker:But no one is particularly excited about the exits because
Speaker:that normally comes at a cost.
Speaker:There's normally obsolete stock.
Speaker:You've got to discount.
Speaker:You've got to manage out the supplier potentially, and it's
Speaker:a completely different story.
Speaker:But what frustrates me as a supply chain person more than a product
Speaker:management person, my colleague Kim does that brilliantly.
Speaker:we complement each other.
Speaker:So it's a completely different story.
Speaker:Products enter with this sort of fanfare and ceremony, and they feel like they're
Speaker:leaving because of neglect, but products have to leave the range, and that's what
Speaker:a good supply chain management or product life cycle management person will do.
Speaker:They will be able to manage through the entry to the exit.
Speaker:Things do not need to linger.
Speaker:As performance deteriorates and you start to watch, and this is really important
Speaker:when it comes to data and systems as well, you can use exceptional reporting.
Speaker:As performance starts to downturn, it isn't necessarily immediately noticeable,
Speaker:but systems can help you notice it quicker than perhaps you might otherwise.
Speaker:And when your old winners are slowly becoming average and then maybe weak, it
Speaker:was time to get rid of them when they'd gone from high performance to average.
Speaker:It was time to start planning the exit because when you see a
Speaker:product decline, it's not normally dramatically fast, but it happens.
Speaker:But what happens as well, many retailers, they just keep them on
Speaker:and on and on, and it's sitting there gathering dust on the shelf.
Speaker:It's tying up your money, and it's just not worth having.
Speaker:So eventually you end up with a range that's much harder to manage, much harder
Speaker:to merchandise, and ultimately it's much harder to trade it profitably because
Speaker:discounting will necessarily have to happen to keep things moving, promotions
Speaker:to keep things moving, and that's where the range creep gets expensive.
Speaker:It's starting to cost you money.
Speaker:And it's not always because products are individually disastrous or because
Speaker:they're a, a, a problem product.
Speaker:It's just they've passed their sell-by date in the metaphorical meaning.
Speaker:Um, obviously if they pass their sell-by date in the food world,
Speaker:that's definitely not something you want to keep on the shelf.
Speaker:But collectively, all this stuff is just creating operational complexity.
Speaker:It needs to be priced, it needs to be promoted, it needs to be managed on
Speaker:the EPOS, it needs to be listed on the website, and complexity is expensive.
Speaker:You've got to do more forecasting, more supplier management
Speaker:Essentially, all these products just create more operational noise for every
Speaker:single department in the business, from marketing through merchandising,
Speaker:buying, supply chain, the lot.
Speaker:And that's where a business has hit the dangerous point because
Speaker:it's no longer managing the range.
Speaker:I'd go as far as to say the range is managing the business, and
Speaker:that's when teams are spending so much of their time reacting.
Speaker:Do we need to run a promotion?
Speaker:Well, how are we gonna manage the stock?
Speaker:How are we gonna clear the warehouses?
Speaker:And they're not thinking strategically.
Speaker:They all feel busy, but it's not necessarily the most effective or
Speaker:profitable way of going around things.
Speaker:And that's why I say legacy stock keeping units, SKUs, however you want to call
Speaker:them, products, they become kind of a killer of margin inside a retailer
Speaker:because there's never any sort of dramatic failures, but people stop questioning the
Speaker:products anymore instead of analyzing, questioning all the time, and creating
Speaker:a well-edited, well-curated range.
Speaker:E-commerce has made this even easier to ignore as a problem, in all fairness,
Speaker:because, well, physical stores, obviously you have to force the discipline of range
Speaker:count because, well, space runs out.
Speaker:You've only got so much room on the shelves.
Speaker:Websites do not.
Speaker:And, I mean, b- back to part one when I talked about the overwhelm,
Speaker:when you look at some of the online retailers and it's just like there's
Speaker:so much stuff, where do you start?
Speaker:Websites never end in terms of capacity to offer more categories, more colors,
Speaker:more variants, more pages, more filters, and it's like, "Argh, I can't take
Speaker:it anymore." And so you end up with so much duplicated product
Speaker:architecture, and nobody's probably reviewed it in years, but that still
Speaker:has to sit in a warehouse somewhere.
Speaker:That still takes up your supply chain capacity, and it creates management noise.
Speaker:You've got to set the product up.
Speaker:You've got to put the descriptions together, the photography, the
Speaker:data, the pricing, and so on, and it just adds so much, and that's
Speaker:where the operational pain sets in.
Speaker:It's across your systems, warehousing, merchandising, stock holding, photography.
Speaker:I could go on.
Speaker:But I think that a lot of retail businesses fail to recognize how much
Speaker:profitability is lost in managing too many products, and it's just draining them of
Speaker:the potential of being clearly curated.
Speaker:And I do think the strongest retailers right now are those who curate the
Speaker:range, and they have discipline, and they have exception reporting that
Speaker:triggers that moment of the highest selling product has just gone to average.
Speaker:Right, okay, I need to start looking at that then.
Speaker:And that's the difference.
Speaker:It's much more intentional.
Speaker:It's a lot less emotional, and arguably it's a lot less lazy, 'cause once a
Speaker:product's set up on the e-commerce, might wells- might as well leave it there.
Speaker:There'll be some automated replenishment in the background.
Speaker:Suppliers will just get an order triggered when, you know, it drops to
Speaker:a minimum level, and it just happens.
Speaker:But that isn't really giving you the best profitability, the best use of
Speaker:your cash flow, or indeed the best customer experience due to the overwhelm
Speaker:So I would say that the best retailers I've met, they have systems in place
Speaker:that mean that they review the range continuously, not just annually.
Speaker:And there's reports and triggers which aren't complicated or expensive.
Speaker:A, a simple EPoS system can do exception reporting, but it can trigger
Speaker:when a rate of sale drops, and then consistently drops for two or three weeks.
Speaker:And that can again trigger the person to think, "Hmm, something's
Speaker:not quite right with that product."
Speaker:And I would also say the best retailers I've ever met make as many quality exit
Speaker:decisions as they do with entry decisions, because that's really fundamental.
Speaker:A range is not just a collection of products, it's choices, and
Speaker:product lifecycle management.
Speaker:You know, everything has a beginning, but quite a lot of things have an end.
Speaker:And some of those things, if they're seasonal or fashionable, that could
Speaker:be quite a short timeframe, or if it's much more standard basics, you
Speaker:know, everyday kitchen essentials, for example, that could have a
Speaker:life cycle of a very long time.
Speaker:But whatever the life cycle is, a range is a system of choices, and
Speaker:that requires maintenance and editing relentlessly, bringing in and taking out
Speaker:And I'm not gonna say a small range is always better because
Speaker:for some people, variety retail, a large range is important.
Speaker:But clarity is even more important because clarity gives control.
Speaker:It explains who you are and who you stand for to your customer.
Speaker:It's great operationally, commercially.
Speaker:And what I'm gonna say now is in the final episode of this series,
Speaker:I'm gonna pull all of this together.
Speaker:So talking about stock pressures and range creep, the next question will be more
Speaker:around if more is not the answer, what is?
Speaker:How do you design a buying and ranging strategy that I guess protects
Speaker:your margins instead of eroding it, but also talks to your customer?
Speaker:it's got clearer vision, entry point structure, and the commercial control.
Speaker:And I guess the most important question is how do you stop the
Speaker:complexity of a range taking over the business in the first place?
Speaker:So if you're listening to this and recognizing parts of your own
Speaker:business in this conversation, well, good, because most businesses
Speaker:already know that there's clutter and it's not being managed properly.
Speaker:And there's products that nobody's challenged in years because
Speaker:maybe the managing directors thinks it's their favorite.
Speaker:And you know where the temporary seasonal edition sort of accidentally
Speaker:became permanent baggage.
Speaker:And what I think a lot of businesses lack is a structured way to assess
Speaker:how serious the issues become for them and what they need to do about it.
Speaker:So that's why I've created a free stock assessment and companion mini guide,
Speaker:and that's gonna help you identify where you've got overlap, duplication, hidden
Speaker:complexity, old stock that's just tying up cash flow, damaging your margin, holding
Speaker:you back, and also taking up space.
Speaker:So there's the wider choice of the playbooks that I mentioned earlier.
Speaker:Uh, the mini guide will be there as well.
Speaker:And if you want to sign up for weekly insights and updates
Speaker:around this podcast, we've got the Retail Reckoning newsletter at
Speaker:retailreckoningpodcast.co.uk/newsletter.
Speaker:You can also pop to the Retail Champion website and pick up my phone
Speaker:number and just give me a shout.
Speaker:Ping me on WhatsApp to make sure I'm not on another call, and
Speaker:I'll be delighted to have a chat.
Speaker:I'm Clare Bailey.
Speaker:This is Retail Reckoning, and I'll be talking to you again in the final
Speaker:part of the Stock Illusion series.
