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.

Episode Transcript

(00:00):
Do you have range creep?

(00:01):
Have you lost controlwithout even noticing?
Are you over-ranged with lowmargins, have to discount, a
mountain of stock in the stockroom?
And this is the case of many perfectlygood retail businesses, and this is
part two of the Stock Illusion series.

(00:22):
I'm Clare Bailey.
This is Retail Reckoning,and welcome back.
In part one, we talked about somethingthat a lot of retailers are feeling right
now, and that's the fact that businessesdon't necessarily have a demand problem.
They've got a decision-making problem.
They've got too much stock, toomany products overlap each other,
cannibalize sales, too much complexity,and that's all sitting underneath an

(00:47):
actual sensible customer experience.
We're overwhelming people.
But I want to move away from thecustomer side of the conversation that
we focused on in part one and look atsomething a lot more operational, where
it's about data, decision-making, andeverything that creates great ranging and
a curated range that people wanna buy.

(01:09):
I don't think businesses suddenlywake up one morning with bloated
ranges or duplicated stock, messycategories, warehouses full of
products that nobody's going to buy.
I actually think that thesituation gets built so slowly,
and that's what makes it dangerous.
That's why I called it range creep.
It isn't feeling like badmanagement while it's happening.

(01:33):
Usually, it feels like good management,and that's where we fall into the trap.
You might add a new line because thecategory's performing well, and it,
that seems like a good idea at the time.
Or a supplier, they introduce anotherproduct and they show it to you and
you think, "Oh, that's quite low risk.Let's test it." Okay, fair enough.
And then you get a best seller, andit gets duplicated by the supplier

(01:56):
into another color or another finish.
And we say to ourselves somethinglike, "If the gray one sells, surely
the navy one will too." That doesn'tfeel particularly bad decision-making.
It doesn't feel reckless.
It just feels like steady expansion.
And that's the issue, that most businessesrarely notice this is happening until

(02:18):
suddenly the range has become so big, soheavy, so more operationally complicated,
and it's not what anyone ever intended
But here's the important bit.
Most businesses did not actuallygrow their range strategically.
It's very much more reactive,and that really matters because
reactive buying creates almost,call it an addictive culture.

(02:42):
You feel like if something isselling well, we have more versions,
we have another colorway, we havesome more sizes, or a competitor
launches something, and thereforewe've got to match it, haven't we?
Well, actually, have we?
And then you've got the suppliers.
They're pushing another range, andwe take it just in case 'cause we
don't wanna left, get left behind.

(03:03):
We don't want the competitionto steal the march, and so
you just keep adding products.
And without anyone consciously reallythinking about it, the default setting
inside the business is to buy more stuff.
Because adding is the easy bit.
I mean, obviously, apart fromthe cash flow implications.

(03:25):
Editing is where it gets hard The addingfeels, I guess, sort of optimistic,
like you're being proactive, likeyou're giving customers choice.
But removing products can feel painful,and it feels more uncommercial in a way.
And the editing forces those difficultdecisions, which should be data-driven.

(03:50):
Editing a range, you look at your top andbottom sellers by sales value, and you
clap your hands and say, "I'm doing reallywell." But if you look at them by margin
value, it might be a very different story.
I remember working with a pet shopretailer who thought their fastest-selling
item, 'cause it was if you just lookedat sales, was a salmon-based product.

(04:12):
And in fact, it wasn't that at all.
It was a chicken-based product.
when you, when you start discoveringthe information in your business and
analyzing the range on the data andmaking data-driven decisions, which
is kind of my geeking out moment whereeverything has to be based on the data,

(04:32):
and you have to ask yourself, "But why?"
also, it's more important to make surethat you're picking the products that
stay on the range that not only deliversales and satisfy customers' needs, yes,
of course, that brings footfall, thatbrings basket size and repeat business,
but it's also about does the data tell youthat that's actually making you any money?

(04:54):
Is it hitting you in the pocket or not?
And that's what forces thosedifficult decisions because you have
to make a decision between, let'ssay, the salmon or the chicken.
Well, if the person that buys thesalmon, if you look at receipt level
data, is also buying lots of otherthings, so their total basket value
is really high, then great, keep it.

(05:14):
If it isn't, if it's just a vanityproduct that gives you a high sales
line and a low margin, that's whenthe decision has to be culled.
And this is why products don't getculled, because it can become emotional.
You say, "Well, it's my top seller.If I take that off the range, what

(05:35):
will people buy?" well, actually,if you haven't got salmon, they'll
probably buy chicken anyway.
So that's why it becomes emotionallyprotected, and it constantly happens.
So many retailers I know developthese sort of emotional attachments
to products because it's somethingthey like, or they like the supplier,

(05:55):
or they've got a fondness for thecategory, or, what else could it be?
A historic best seller.
there's products sitting in ranges thatprobably shouldn't be, and they're only
surviving the cull because somebody'sthinking, "Well, it used to be really
good," or " We've always sold that," or,"People might like it again in future.

(06:18):
I don't want to get ridof it." Yeah, great.
Maybe.
But good retail doesn't run onnostalgia, it runs on relevancy,
and that changes over time.
It expires.
Customers' needs and wants change.
Our tastes and preferences change.
We get told we used to think somethingwas good for us and it isn't anymore,

(06:39):
or colors or fashion or whatever.
It, across all sectors and this is oneof the biggest operational issues that
retailers struggle with because Ofcourse, every product on your range, you
brought it into the business for a reason.
But what if the reason's expired?

(07:00):
don't you ask yourself, "Does the reasonthat I brought this in still exist?" And
that's where we have to revert to thingslike product life cycle management.
We've got a playbook on that actually atretailchampion.co.uk/retail-playbooks.
Um, we also think about productsare very good at launch, and I

(07:25):
mean, everybody loves a good launch.
We've got a whole new season coming out.
We're gonna do launch meetings, pressreleases, plans, merchandising, all these
marketing campaigns, and everyone getsreally, really excited about the newness.
But no one is particularlyexcited about the exits because
that normally comes at a cost.

(07:45):
There's normally obsolete stock.
You've got to discount.
You've got to manage out thesupplier potentially, and it's
a completely different story.
But what frustrates me as a supplychain person more than a product
management person, my colleagueKim does that brilliantly.
we complement each other.
So it's a completely different story.

(08:07):
Products enter with this sort of fanfareand ceremony, and they feel like they're
leaving because of neglect, but productshave to leave the range, and that's what
a good supply chain management or productlife cycle management person will do.
They will be able to managethrough the entry to the exit.

(08:30):
Things do not need to linger.
As performance deteriorates and you startto watch, and this is really important
when it comes to data and systems aswell, you can use exceptional reporting.
As performance starts to downturn, itisn't necessarily immediately noticeable,
but systems can help you notice itquicker than perhaps you might otherwise.

(08:54):
And when your old winners are slowlybecoming average and then maybe weak, it
was time to get rid of them when they'dgone from high performance to average.
It was time to start planningthe exit because when you see a
product decline, it's not normallydramatically fast, but it happens.

(09:18):
But what happens as well, manyretailers, they just keep them on
and on and on, and it's sittingthere gathering dust on the shelf.
It's tying up your money, andit's just not worth having.
So eventually you end up with a rangethat's much harder to manage, much harder
to merchandise, and ultimately it's muchharder to trade it profitably because

(09:41):
discounting will necessarily have tohappen to keep things moving, promotions
to keep things moving, and that'swhere the range creep gets expensive.
It's starting to cost you money.
And it's not always because productsare individually disastrous or because

(10:03):
they're a, a, a problem product.
It's just they've passed their sell-bydate in the metaphorical meaning.
Um, obviously if they pass theirsell-by date in the food world,
that's definitely not somethingyou want to keep on the shelf.
But collectively, all this stuff isjust creating operational complexity.
It needs to be priced, it needs to bepromoted, it needs to be managed on
the EPOS, it needs to be listed on thewebsite, and complexity is expensive.

(10:28):
You've got to do more forecasting,more supplier management
Essentially, all these products justcreate more operational noise for every
single department in the business,from marketing through merchandising,
buying, supply chain, the lot.
And that's where a business hashit the dangerous point because

(10:48):
it's no longer managing the range.
I'd go as far as to say the rangeis managing the business, and
that's when teams are spendingso much of their time reacting.
Do we need to run a promotion?
Well, how are we gonna manage the stock?
How are we gonna clear the warehouses?
And they're not thinking strategically.
They all feel busy, but it's notnecessarily the most effective or

(11:11):
profitable way of going around things.
And that's why I say legacy stock keepingunits, SKUs, however you want to call
them, products, they become kind ofa killer of margin inside a retailer
because there's never any sort of dramaticfailures, but people stop questioning the

(11:33):
products anymore instead of analyzing,questioning all the time, and creating
a well-edited, well-curated range.
E-commerce has made this even easier toignore as a problem, in all fairness,
because, well, physical stores, obviouslyyou have to force the discipline of range
count because, well, space runs out.

(11:55):
You've only got so muchroom on the shelves.
Websites do not.
And, I mean, b- back to part onewhen I talked about the overwhelm,
when you look at some of the onlineretailers and it's just like there's
so much stuff, where do you start?
Websites never end in terms of capacityto offer more categories, more colors,

(12:17):
more variants, more pages, more filters,and it's like, "Argh, I can't take
it anymore." And so you end up withso much duplicated product
architecture, and nobody's probablyreviewed it in years, but that still
has to sit in a warehouse somewhere.
That still takes up your supply chaincapacity, and it creates management noise.

(12:39):
You've got to set the product up.
You've got to put the descriptionstogether, the photography, the
data, the pricing, and so on, andit just adds so much, and that's
where the operational pain sets in.
It's across your systems, warehousing,merchandising, stock holding, photography.
I could go on.
But I think that a lot of retailbusinesses fail to recognize how much

(13:02):
profitability is lost in managing too manyproducts, and it's just draining them of
the potential of being clearly curated.
And I do think the strongest retailersright now are those who curate the
range, and they have discipline, andthey have exception reporting that
triggers that moment of the highestselling product has just gone to average.

(13:26):
Right, okay, I need tostart looking at that then.
And that's the difference.
It's much more intentional.
It's a lot less emotional, and arguablyit's a lot less lazy, 'cause once a
product's set up on the e-commerce, mightwells- might as well leave it there.
There'll be some automatedreplenishment in the background.
Suppliers will just get an ordertriggered when, you know, it drops to

(13:47):
a minimum level, and it just happens.
But that isn't really giving you thebest profitability, the best use of
your cash flow, or indeed the bestcustomer experience due to the overwhelm
So I would say that the best retailersI've met, they have systems in place
that mean that they review the rangecontinuously, not just annually.

(14:12):
And there's reports and triggerswhich aren't complicated or expensive.
A, a simple EPoS system can doexception reporting, but it can trigger
when a rate of sale drops, and thenconsistently drops for two or three weeks.
And that can again trigger theperson to think, "Hmm, something's

(14:32):
not quite right with that product."
And I would also say the best retailersI've ever met make as many quality exit
decisions as they do with entry decisions,because that's really fundamental.
A range is not just a collectionof products, it's choices, and
product lifecycle management.

(14:52):
You know, everything has a beginning,but quite a lot of things have an end.
And some of those things, if they'reseasonal or fashionable, that could
be quite a short timeframe, or ifit's much more standard basics, you
know, everyday kitchen essentials,for example, that could have a
life cycle of a very long time.

(15:13):
But whatever the life cycle is, arange is a system of choices, and
that requires maintenance and editingrelentlessly, bringing in and taking out
And I'm not gonna say a smallrange is always better because
for some people, variety retail,a large range is important.

(15:33):
But clarity is even more importantbecause clarity gives control.
It explains who you are and whoyou stand for to your customer.
It's great operationally, commercially.
And what I'm gonna say now is inthe final episode of this series,
I'm gonna pull all of this together.
So talking about stock pressures and rangecreep, the next question will be more

(15:59):
around if more is not the answer, what is?
How do you design a buying andranging strategy that I guess protects
your margins instead of eroding it,but also talks to your customer?
it's got clearer vision, entry pointstructure, and the commercial control.

(16:21):
And I guess the most importantquestion is how do you stop the
complexity of a range taking overthe business in the first place?
So if you're listening to thisand recognizing parts of your own
business in this conversation,well, good, because most businesses
already know that there's clutterand it's not being managed properly.

(16:43):
And there's products that nobody'schallenged in years because
maybe the managing directorsthinks it's their favorite.
And you know where the temporaryseasonal edition sort of accidentally
became permanent baggage.
And what I think a lot of businesseslack is a structured way to assess

(17:05):
how serious the issues become for themand what they need to do about it.
So that's why I've created a free stockassessment and companion mini guide,
and that's gonna help you identify whereyou've got overlap, duplication, hidden
complexity, old stock that's just tying upcash flow, damaging your margin, holding

(17:28):
you back, and also taking up space.
So there's the wider choice of theplaybooks that I mentioned earlier.
Uh, the mini guide will be there as well.
And if you want to sign up forweekly insights and updates
around this podcast, we've gotthe Retail Reckoning newsletter at
retailreckoningpodcast.co.uk/newsletter.

(17:51):
You can also pop to the RetailChampion website and pick up my phone
number and just give me a shout.
Ping me on WhatsApp to make sureI'm not on another call, and
I'll be delighted to have a chat.
I'm Clare Bailey.
This is Retail Reckoning, and I'llbe talking to you again in the final
part of the Stock Illusion series.