A large manufacturer saw that its bacon brand sales were down $1.6 million. The supplier asked IRI to help it understand the drivers of this decline and identify potential turnaround strategies.
Deeper analysis found that there were particularly strong declines at a certain retailer. The retailer had delisted four of the supplier’s items. During the 12-week period following the deletion, the bacon category at that retailer saw sales declines of $900,000, which was $400,000 more than the previous period.
To further understand the impact of the assortment change, the IRI team analyzed the supplier’s bacon dollar sales using the retailer’s loyalty card data. The sales decomposition revealed that the brand’s sales decline of $1.6 million was driven by both penetration declines and trip declines. Units also decreased sharply.
IRI found that loyalty played a significant role in the declines the retailer experienced. In the 13 weeks following the delistment of the four bacon brands, the households that bought the bacon supplier’s brands showed significant changes in their purchase behaviors, resulting in the $900,000 category sales decline and nearly $5 million in total store declines due to losses from these households. IRI also found that:
The IRI team worked with the supplier to craft a plan that would reverse the trends for both the supplier and the retailer. By overlaying Experian-based supplier-bacon households over the retailer’s loyalty data, IRI identified several household segments that over-index as bacon buyers of the supplier’s brands within the retailer’s network of stores. This allowed the supplier to compile a list of 200+ stores that served as good targets for the reintroduction of its products.
The retailer reevaluated its decision to delist the brands, with a focus on reversing store and category impact and overall profitable sales growth. Additionally, because the retailer found these insights so powerful, the retailer’s sourcing team is now regularly using this type of analysis to understand how the total store’s long-term performance could be impacted by potential lost shoppers prior to making its assortment decisions.
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