By Ann Bagel Storck

 Retailers may significantly reduce SKUs (stock-keeping units) or even cut entire product lines as they look to reduce costs and maximize margins, according to retail consultancy Willard Bishop.

Food categories that could be especially vulnerable to SKU rationalization include frozen meat and poultry, ethnic and specialty foods and Mexican products.

Willard Bishop said suppliers must understand five key metrics in order to assess their category and brand vulnerabilities:

1. Variety: What does the retailer need to meet consumer demand?

2. Profitability: How much money does the retailer make on this item/line/category?

3. Productivity: How productive is this shelf space?

4. Working capital: What is the inventory costing, and what is the ROI?

5. Growth: Is the category growing or declining?