In January, we predicted that 2026 would force the food trade to take a hard look at assortment. BJ’s has since put a number on its plans, Dollar General is continuing its reductions, and even PepsiCo is trimming its U.S. product portfolio.
In January, we made what we called a “wild” prediction for 2026: Grocers would start giving their SKU counts a significant haircut. Nine months later, I’m comfortable saying we called it right.
BJ’s Wholesale Club plans to remove about 20% of its SKUs over the next couple of years. Dollar General says it has already taken more than 1,500 SKUs out of its assortment and has a plan for a further net reduction this year. PepsiCo, meanwhile, has laid out a plan to cut nearly 20% of its U.S. product SKUs. These are different businesses making different decisions, but each is asking whether another product variation earns its place in the operation.
BJ’s Puts a Number on the Cut
Of the retailers we looked at, BJ’s has the clearest forward-looking target. CEO Robert Eddy told analysts in August that a legacy club carries about 7,500 SKUs on average. He wants to bring that figure down to roughly 6,000 to 6,500 over time, closer to the assortment in newer clubs. The company expects the reductions to unfold over the next couple of years.
Eddy also offered something of a warning: BJ’s has tried cutting SKUs before, lost sales and then added some items back. This time, the company is looking for duplicate choices it can remove while introducing products that give members a reason to buy. In beverages, for example, Eddy described moving away from carrying multiple package formats of the same traditional soda while adding newer offerings. It’s smart rationalization.
That is the difficult part. Removing a slow seller may simplify replenishment. Removing the particular size, flavor or brand a member came in to buy may send the whole basket elsewhere.
Dollar General Keeps Cutting
Dollar General’s program has been underway longer. On its March earnings call, Chief Operating Officer Emily Taylor said the retailer had removed more than 1,500 SKUs over the preceding few years and was working on a plan for a net reduction in 2026. As reported by Motley Fool, management tied the effort to simpler store operations, less inventory complexity and a more efficient supply chain.
In August, Taylor said the next reductions would be more selective. Dollar General was testing store layouts that remove a substantial number of less productive SKUs from lower-volume locations. It was also examining assortment differently in stores with high shrink. That sounds much closer to the argument I made in January: The right mix may differ from store to store.
PepsiCo Makes Its Own Cut
PepsiCo, with its gigantic food-trade footprint, belongs in this conversation, too. It’s reducing the products it offers. PepsiCo told investors it planned to cut nearly 20% of its U.S. SKUs in the first half of 2026, alongside manufacturing and distribution changes intended to reduce costs. A supplier’s portfolio cut doesn’t tell us how many items any particular grocer will take off its shelves, but at the end of the day it does mean fewer variations for retailers to consider carrying.
For the record, PepsiCo announced that plan in December 2025, before our January prediction. The call we got right was the direction of the broader assortment discussion, and BJ’s subsequent target and Dollar General’s continuing work show how that discussion is playing out at retail.
Of course it remains to be seen what shoppers will do when the cuts reach the shelf. As I wrote in January, a smaller assortment can give a retailer more focus; the store will feel more “with it” to shoppers, even if they can’t quite put their finger on what’s changed. The downside risk is that it can also take away a reason someone chose that store. BJ’s experience with its earlier cuts makes the risk plain. The grocer that gets this right will know which choices customers can happily live without – and which ones bring them through the door.