Reduction in Coles products is a lesson in planning for uncertainty

Australian supermarket, Coles, recently announced plans to reduce its product range by 10%, removing around 2,500 items from its shelves. The decision aims to cut costs, streamline operations, and focus on core, high-demand products. For Coles, it’s a strategic shift toward efficiency - but for suppliers, it’s a wake-up call. Being de-listed means losing both sales and visibility, forcing many businesses to rethink their distribution strategies and explore alternative channels.

The impact on Coles products suppliers

For businesses whose products are being de-listed, the consequences are immediate. Losing shelf space means losing a vital sales channel, reducing revenue, and weakening brand visibility. In a competitive retail landscape, fewer slots on supermarket shelves mean greater competition for survival. Brands that once relied heavily on this major supermarket to get their products to consumers will need to pivot quickly, looking at new ways to regain visibility and maintain customer reach. Options could include reducing the price of the products for retailers, so they make more profit from having them on the shelf, or alternative distribution channels, such as e-commerce or partnerships with smaller retailers – i.e. specialty food stores and health food shops.

Planning for uncertainty with IBP

The decision to reduce Coles products has highlighted how risky it is for companies to rely on a single sales channel and why it’s essential for suppliers to anticipate retailer decisions and have a backup plan. While they may not have been able to predict that Coles would make such a drastic move, having a robust Integrated Business Planning (IBP) process in place would put them in a better position to model, respond and adapt to this change in the market.

IBP provides a framework for companies to formally consider different potential future scenarios on a regular basis, and develop contingency plans for each outcome, which gives them a much stronger chance of responding quickly and effectively if conditions change dramatically. For Coles products at risk of being de-listed, IBP-driven forecasts can help their suppliers quantify the potential revenue loss and identify alternative opportunities and areas for growth.

Demand planning also plays a critical role. IBP enables real-time insights on how products are performing, which enables the leadership team to make data-driven decisions to optimize their product portfolio. Companies are therefore able to focus on high-performing or in-demand items, reducing their risk of being de-listed in the future.

Another key benefit of IBP is financial and operational alignment. When a major retailer like Coles makes a decision that will directly affect the sale of a product, IBP ensures the business has overall visibility to enable it to adjust production, marketing spend and distribution strategies accordingly. This level of integration allows the business to remain agile without overextending resources.

Agility – the key to future success

The last five years have been an uncertain period for retailers, and Coles’ actions are a sign that unpredictability isn’t going away anytime soon. Suppliers can no longer afford to rely solely on supermarket partnerships. Those who adopt Integrated Business Planning will be better positioned to manage disruptions, diversify their channels, and maintain stability.

A well-designed Integrated Business Planning process that is actively owned and deployed by the executive team allows organizations to manage significant changes to the business environment in a controlled and deliberate manner, providing clear direction to the whole business on the way forward. Whether dealing with de-listings, supply chain disruptions, or shifts in consumer behavior, businesses that embrace IBP will be better equipped to turn uncertainty into opportunity.

Is your business prepared for retail disruptions? Find out more about how IBP can help you plan for uncertainty by getting in touch with our team.

Read more on this topic in our white paper – Navigating Uncertainty: Is Your IBP Process Fit For The Future?