The Relationship Between Assortment Size and Category Sales: A Panel Data Analysis on National Brands and Private Labels

Abstract

Assortment is one of the most important tools for retailers differentiating themselves from competitors, attracting customers into the store and increasing their sales. This paper analyzes the relationship between assortment size—in terms of number of Stock Keeping Units—and category sales level, differentiating between National brands (NBs) and Private Labels (PLs). In order to do this, a panel database containing information about weekly assortment size and volume sales between 2009 and 2014 for all supermarkets operating in Spain is used. Our results confirm a positive and significant relationship between both aspects; nevertheless, the intensity of such result depends on the type of brand (NB vs. PL) but also on the frequency and penetration of the category under study.