By the end of 2023, more than 1,600 AWG member stores, nearly 50%, will have executed a Category Initiative. Why? The Category Initiatives pillar of Convergence helps retailers win at the shelf and improve bottom-line costs by providing optimal assortments and best-in-class shelf sets. In 2022, AWG launched fifteen category initiatives representing $1.7 billion in topline sales while showing margin improvement across the categories. Assortment work in 2022 also included 18 category reviews and 135 category refreshes to continuously update shelf sets for members. Overall, AWG’s merchandising partnerships with One Source and Category Initiative set teams enabled over 5,300 resets to be completed!
Growing Sales and Margin with Category Initiatives
To measure the effect of Category Initiatives, the team used warehouse shipment data for participating stores. Prior to the reset, the team established a reset baseline period as close to the previous year as possible. Post-set tracking began two weeks after the reset date to ensure all new items were added and discontinued items were removed from the set before tracking performance. Measurements were done in a short time frame after resets to filter out promotional activity impacts. This point in time analysis is used in the industry to measure the immediate effects on consumers as they shop the new planogram implementation. Results showcase the range per store in key metrics.
The Impact of an Optimal Assortment
In 2023, AWG and VMC continue to build on the demonstrated success with 16 category initiatives representing $1.9 billion in AWG sales across the center store, frozen, dairy, health and beauty and wellness categories. Midway through the year, sign-ups have surpassed 7,500 sets, with 1,000+ unique stores signed up. Participation has already outperformed 2022 by 20% and continues to grow as the year progresses.
As of July, nine category initiatives have launched into the retail implementation phase, after which participating stores can expect improved sales and margin as a result of the optimized assortment and updated shelf set. On average, stores that participate in the successful completion of a category initiative reset are forecasted to see a nearly 4.5% sales and margin growth in the category!
| 2023 Category Initiatives | ||
| Category | % Sales Growth | % Margin Growth |
| Ice Cream | 4.00% | 4.70% |
| Toaster Pastry & Breakfast Bars | 5.00% | 5.60% |
| Bath & Body | 2.50% | 3.50% |
| Condiments | 5.00% | 4.00% |
| Pasta | 4.90% | 5.70% |
| Pasta Sauce | 6.90% | 6.40% |
| Antiperspirant/Deodorant | 3.10% | 2.20% |
| Pain Remedies | 3.20% | 2.70% |
| Frozen Vegetables | 6.60% | 4.70% |
| In-Aisle Candy | 3.70% | 4.80% |
| Average | 4.49% | 4.43% |
A look ahead to 2024
In efforts to drive timely alignment with retailers, the 2024 calendar is available for review on StoreFront. Activities in 2024 will include 19 category initiatives representing $1.7 billion in sales, along with 26 category reviews and 127 refreshes. The categories were selected based upon seasonality, vendor innovation, and frequency based on category and consumers trends. While there is still much to accomplish in 2023, 2024 will be another year of growth through Convergence.
