An Analysis of Assortment Definition in the Brazilian Supermarkets and its Influence on Sales

Abstract

The Brazilian economy has expanded rapidly over the 2000s raising broad changes in various sectors of economic activity. As part of the consumer market three characteristics are absolutely striking: significant increase in the purchasing power of individuals, rapid growth of the level of information on products and services and diversification of products offer. In this scenario the huge variety of products available to consumers through a wide range of distribution alternatives, not only concerning to different store formats, but also other channels, such as the Internet, turned the assortment definition for a retailer a critical issue in establishing a competitive position. To study the importance of the assortment in the dynamics of the retail market competition is the exactly purpose of this article. In other words, we tried to evaluate the significance of a possible relationship between assortment and sales to the final consumer of FMGC. Therefore, we first used the data of Scantrack® stores panel, from The Nielsen Co. The data were collected over 116 weeks in stores located in the Greater São Paulo. The correlation study covering diversity of assortment and sales volume, was based on the analysis of twenty-seven major product categories. The selected categories are responsible for over 50% of total consumption of the panel products studied by Nielsen. Based on this information we were able to show that the average number of items offered, variable proxy of assortment and depth dimensions, maintains significant and high correlation with sales to final consumers despite the types and sizes of supermarkets analyzed.