Merchandising a Slow-Moving Filter Line
You manage the front counter and a four-aisle retail floor at an independent parts store. Oil filters for one popular import engine family have sold 6 units in 90 days, while the shelf holds 48 units across three part numbers. Shelf space is 4 feet, and the category's gross margin is 22%. A neighboring chain advertises the same filters at a price 15% below your retail, and two customers this month mentioned it. Your district goal is to raise turns on the filter category without losing the import customers who also buy wipers and cabin filters. You have one endcap available and a $300 monthly promotional budget.
1. Diagnose the inventory and merchandising problem before recommending an action.
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Six units in 90 days is roughly 0.07 units per day across three SKUs, so 48 units is many months of supply - the category is over-assorted and overstocked relative to demand. Four feet of shelf for a low-turn, low-margin line is poor space productivity. The price gap versus the chain is real but small in dollars on a low-ticket item, so matching price alone will not fix turns. The problem is assortment depth and visibility, not just price.
2. Propose a concrete plan using the endcap and the $300 budget, and state what you would measure.
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Consolidate to the one or two fastest-moving part numbers and return or transfer slow SKUs to reduce on-hand toward a 60-90 day supply. Use the endcap for a bundled oil-change kit (filter plus drain plug gasket, or filter plus cabin filter) rather than a straight price cut, so margin is protected and attach rate rises. Spend part of the $300 on a shelf tag and a small bundle discount, not a blanket markdown. Measure units per SKU, bundle attach rate, and category gross profit dollars over 30 and 60 days; adjust assortment if a SKU still does not move.
3. How do you respond to the two customers who cited the chain's lower price?
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Acknowledge it honestly and redirect to total value: correct application, in-stock availability, and the bundle. If a price match is store policy, apply it within policy rather than improvising. Do not argue or bad-mouth the chain. Capture the interaction so you learn whether price or availability is actually driving the loss.