Jewel-Osco is shedding merchandise as part of a major makeover aimed at boosting profits and fending off Wal-Mart Stores Inc.
Chicago's largest grocer is testing a new store format in Bolingbrook that cuts out 15% to 25% of products. Jewel says it plans to take the Bolingbrook design to more stores under a mandate from parent company Supervalu Inc. to reduce clutter, cut costs and make room for more of its own brands.
But Jewel, which has long prided itself on offering a wide selection, risks alienating shoppers by removing their favorite brands. Wal-Mart and Deerfield-based Walgreen Co. pursued similar initiatives this year. Both chains have said they had to restock some items when customers went elsewhere but continued to scale back inventory.
Supervalu CEO Craig Herkert"There is an opportunity for them to sharpen their inventory, but (product) reduction is always very difficult because you are always taking out something that someone bought," says Scott Mushkin, an analyst in New York at Jefferies & Co.
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