Retailers are slimming down product lines as they grapple with higher costs to import, move and store goods. The WSJ Logistics Report's Liz Young reports that companies from Helen of Troy to Under Armour are narrowing product selections to cut costs and simplify supply chains in the face of rising transportation costs and tariffs.
The strategy reverses a yearslong expansion of product selection to meet consumer demand for new colors, styles and sizes that was turbocharged by endless options available on e-commerce sites.
Some retailers began abandoning certain product lines after grappling with product shortages and overstocks during the pandemic. The efforts accelerated over the past 18 months as new levies, surging fuel costs and uncertain consumer demand weighed on margins.
About a quarter of U.S. companies recently surveyed by professional-services company British Standards Institution said they plan to reduce the range of products they sell over the next six months.
Helen of Troy, which sells products such as OXO kitchenware, said at a recent shareholder meeting it has taken measures including trimming its product selection to reduce the impact of higher U.S. tariffs. Under Armour has cut more than 25% of its products over the past two years and is investing more in its bestselling items.
Quote of the Day
Supply-Chain Strategies
Companies are using tariff refund windfalls to cut prices and absorb higher supply-chain costs. The WSJ Leadership Institute's Kristin Broughton and Jennifer Williams write that e.l.f. Beauty, Walmart and Tractor Supply are among retailers appealing to cost-conscious shoppers by rolling back price increases as consumers grapple with inflation. Walmart has rolled back prices on 11,000 items, including ground beef, funding the price cuts with refunds worth $2.9 billion.
E.l.f., which has received roughly $50 million in refunds so far, cut prices on about 10% of its lineup. Appliance maker SharkNinja, which expects to receive refunds totaling $247 million, isn't raising prices this year. Tractor Supply is using tariff refunds to absorb rising freight and fuel costs. The retailer is also rolling out promotions and lowering prices on items such as pine shavings and premium pet food.
Number of the Day
Global container capacity, measured in 20-foot equivalent units, stuck in port congestion, the equivalent of 6.6% of the fleet, according to Sea-Intelligence.
In Other News
United Parcel Service is shaking up its operating model and executive roles as part of a broad reorganization. (WSJ)
Port congestion in Asia is worsening after Typhoon Saudel hit eastern China. (Journal of Commerce)
Container dwell times at the ports of Los Angeles and Long Beach rose to their highest level in more than a year on surging imports. (Sourcing Journal)
Turkish and Somali forces freed a cargo ship after it was hijacked by pirates off the Somali coast. (gCaptain)
Chinese carmaker BYD inquired about taking over an idled Stellantis plant in the Toronto suburbs. (Bloomberg)
Cleanup crews have cleared much of the millions of pounds of food left to rot after a warehouse burned for more than a week in Los Angeles. (New York Times)
Thieves made off with tens of thousands of cans of Pabst beer in separate heists from a Southern California warehouse. (Associated Press)
About Us
Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.
Forwarded this email by a friend? Sign up here >