Sign In

Choice paralysis: why retailers are finding that less is more

The UK’s big four supermarket chains have stopped stocking thousands of products in recent years. What’s behind this move – and will it prove a win-win for them and their customers?

little boy trying to choose drink from vending machine

“When people have no choice, life is almost unbearable,” wrote US psychologist Barry Schwartz in his 2004 book The Paradox of Choice. “But, as the number of choices keeps growing, negative aspects of having a multitude of options begin to appear… At this point, choice no longer liberates, but debilitates.”

Ever since Schwartz argued that having too much choice is bad for our mental health, there has been a seemingly relentless proliferation of products ranging from energy drinks to smartphone apps. Yet, among UK supermarkets at least, the tide has been turning in recent years. 

Spurred by the success of their no-frills rivals Aldi and Lidl, the nation’s grocery giants have been calling time on unnecessary shelf-blockers, quietly ditching many of their less popular offerings and streamlining their product ranges in the process. 

Market research firm Kantar reports that the UK’s big four supermarket chains – Asda, Morrisons, Sainsbury’s and Tesco – have delisted about 5% of their products every year since 2018, consigning thousands of items to retail history.

“Rationalisation is a trend that began before Covid. Taking stock out of the mix is the only direction of travel,” says Kantar’s head of retail and consumer insight, Fraser McKevitt. “As low-assortment discounters Aldi and Lidl continue to ride high, despite having smaller stores and offering far less choice, the days of building new hypermarkets to house vast numbers of products is well and truly over.”

Asda, which has axed about 6,000 lines since 2019, believes that there is demand from its customers for “a simpler, streamlined shopping experience”. Its move towards “smaller, more carefully curated ranges” is freeing up space in stores for the company to expand its partnerships with third-party fashion brands such as New Look and Missguided.

“All retailers are after that perfect Goldilocks scenario: not too much choice, not too little, but just the right amount. Yet there are several competing forces at play,” says Bryan Roberts, founder of retail consultancy Shopfloor Insights. “Stocking fewer product lines means that there are fewer suppliers to negotiate with, fewer trucks to manage and less work to do on gap-scanning and maintaining price integrity. But it also means a reduction in lucrative listings fees from suppliers. And, if you cut the wrong things, it may even lead some shoppers to desert you.”

All retailers are after that perfect Goldilocks scenario: not too much choice, not too little, but just the right amount

For example, any retailer that ignores the growing demand for genuine innovations, such as allergen-free products or plant-based meat substitutes, will do so at its peril, Roberts adds.

“If research tells you that most of your customers are clamouring for the latest wheat-free craft beer or must-have veggie burger, you need to find room for it, even if that would mean jettisoning other reasonably profitable stuff,” he says.

With ongoing supply problems hindering many international brands from reaching the UK, shortages on shelves have been joined by an inflation-fuelled decline in living standards. Given this combination of factors, there may not be a better time for retailers to drop more of their weakest lines and adopt a ‘short-term pain, long-term gain’ approach to choice overload. So says Dr Cathrine Jansson-Boyd, consumer psychologist and reader at Anglia Ruskin University.

“Aldi and Lidl have capitalised brilliantly on the prevailing ‘Buy British’ mood among consumers,” she notes. “With international supply still a key issue in fast-growing categories such as dairy, they are working to replace all hard-to-source foreign brands with locally produced equivalents that will cost both them and their customers less money.”

The ultimate responsibility for introducing brand extensions, bigger sizes, new flavours and innovative packaging formats lies with the brand owners, nearly all of whom see product innovation as the key to growth. Are they also taking a different approach, having realised that there is such a thing as offering consumers too much choice?

Jansson-Boyd reports that “Unilever is streamlining its entire product portfolio in a bid to boost efficiency, while there are signs that other fast-moving consumer goods firms are also taking advantage of the current state of the supply chain to take stock of the situation. Consumer attitudes may not be their prime motivation for all this rationalisation, but customers and brands are on the same page on this occasion.”

Humans are creatures of habit – we tend to buy the same items again and again. But we also crave convenience. So, while a small proportion of customers might complain about the delisting of a preferred product or simply vote with their feet, most will swiftly forget yesterday’s favourite ice cream or tinned soup and seek out the closest alternatives.

In the case of most everyday goods, six options is the upper limit when it comes to our ability to handle the cognitive pressure involved in choosing one product, according to psychologists. But, when it comes to items that we might use to make a statement about ourselves – clothes or cars – for example, we both expect and relish a far wider selection. 

We are “cognitive misers with limited attention spans”, according to Patrick Fagan co-founder and chief scientific officer of Capuchin Behavioural Science, a consultancy that uses psychological principles to show its clients how consumers mentally process and conceptualise brands and products. 

“Given that one-third of the products in a big supermarket stocking up to 50,000 items aren’t even looked at, there’s a lot of wasted space that could be used to improve the shopping experience,” says Fagan, who was lead psychologist at Cambridge Analytica before it went into administration in 2018. “The thing about shopping as an experience is that it’s far more emotional than rational. If a retailer can genuinely make our lives easier by offering us fewer, better-chosen products that we actually want to buy, we will prove incredibly loyal.”