On the issue of inventory, my understanding is that reducing inventory and SKUs will ideally:

- Decrease internal theft of merch sitting on shelves / merch lost in system / merch that is poorly tracked (making tracking of who is stealing what more difficult)
- Decrease damage/spoilage of merchandise
- Reduce SKUs of high shrink items
- Reduce man hours dedicated to inventory management so as to free up staff in the duties you flagged

I don’t know whether they’ll be successful, but I can see a connection. I think the optimism and its timing stems from the fact that end of year is when they expect to see a lot of the discounted product culled and the SKU changes begin to take effect. The inventory by store has been in decline, especially for non consumables. And they’ve now closed a number of temporary storage locations (that arose during COVID).

If I wanted to make the bearish case, to me the troubling aspect of this is that all of the above fits with the trend towards consumables, which bakes in lower margins going forward.