Effective category management depends on the role of the category

Assessing a retailer's performance in a category is important to both manufacturers and retailers. Based on data from 19 food categories sold in 106 major supermarket chains operating in the largest 50 retail markets in the U,S,, the work reported in this article uses an analysis of variations in category performance across retailers to infer the key drivers of effective category management and how those drivers depend on the role the category plays in the overall retail portfolio. Not surprisingly, the best performing retailers: (a) offer broader assortments, (b) have strong private label programs, (c) charge significantly lower everyday prices, and (d) use feature advertising to drive store traffic and display to increase in-store purchases. More interestingly, we find systematic differences in the impact of the price, promotion and assortment variables that depend importantly on the role (staple, variety enhancers, niche, or fill-in) that the particular category plays in the store's overall portfolio. (C) 2001 by New York University. All rights reserved.