A range of retailers are trimming the number of items they sell to clean up their balance sheets. Dollar General, Under Armour, BJ’s Wholesale Club and Lululemon have all announced cuts this year. Analysts say it can steady sales, but it does not fix a brand problem on its own.
As shoppers cut spending in the face of high gas and food prices, retailers are reducing the number of items they sell, tracked as stock-keeping units (SKUs), CNBC reported on October 10.
Who Is Cutting What
| Retailer | Announced |
|---|---|
| Dollar General | Trimmed 1,500 SKUs (by March 2026) |
| Under Armour | Cut SKUs 25% in recent years; plans another 25% |
| BJ’s Wholesale Club | Plans to cut roughly 20% of SKUs |
| Lululemon | Cut North America SKUs by 15% |
Why They Do It
Fewer items can stabilise sales, or return a company to growth, and reduce the chance of being stuck with unwanted stock. Struggling products lead to discounting, which hurts profit. The cost is less choice for shoppers.
BJ’s CEO Robert Eddy said removing options, such as fewer scents of body wash, pushes sales into the remaining items and makes room for new categories: “we can cut SKUs, and see sales go up, and see margin dollars go up.”
Under Armour CEO Kevin Plank said the company is “managing for quality. Fewer products with greater purpose, tighter execution and a clear reason to buy.”
The Brands Under Pressure
- Under Armour: operating income turned negative in fiscal 2025 and 2026
- Lululemon: sales grew by more than $500 million from fiscal 2024 to 2025, yet operating profit fell by about $300 million; shares are down around 65 percent over two years
- Nike: shares are down about 45 percent this year; it said it is “rebalancing” and cut revenue from classic footwear franchises by more than $2 billion in fiscal 2026
The Analyst’s Warning
Guggenheim Securities analyst Simeon Siegel said “selling fewer options is not the same as selling fewer things”, and that for Lululemon “simply cutting SKUs, simply saying we need to have better product is not the answer”.
Lululemon reported $6.3 billion in US sales in fiscal 2025. Siegel said $3 billion to $4 billion is where companies typically reach a healthy saturation level, above which they “start cheapening what they stand for”. He called Nike an exception, with $20 billion in North American sales in fiscal 2026.
For discount chains such as Dollar General, cutting SKUs does not necessarily allow higher prices. It helps them manage inventory and refine their offering.
Image: A Lululemon store in New York City (file photo). Photo: ajay_suresh / Wikimedia Commons (CC BY 2.0)
