A leading Libyan retailer, faced significant operational challenges due to its highly informal business processes developed from various acquisitions. This piecemeal approach allowed RetailCo* to maintain local relevance by making merchandising decisions such as category assortment, promotions, and pricing at a local level. However, this decentralised strategy impeded the company’s ability to capitalise the full cost benefits associated with scale, which negatively affected its price competitiveness and profit margins.
To address these inefficiencies, RetailCo enlisted our consultancy to help design, pilot, and rapidly scale a new, more formalised merchandising model. The task was compounded by previous unsuccessful integration attempts and lingering doubts about sacrificing local relevance for scale benefits.
Strategic Reformulation and Progressive Implementation
Working in close collaboration with RetailCo’s executive leadership across national and business units, we established a set of strategic principles and management behaviours tailored to RetailCo’s unique corporate culture and operational dynamics. Our approach leveraged best-in-class, customer-led category management techniques, refined through extensive cross-functional workshops.
The newly formulated category management process was both data-driven and customer-centric. It included detailed analytics for category management, such as all-in supplier profitability, which unified the company’s voice in supplier negotiations to stimulate category growth, reduce costs, and encourage supplier investments. Metrics like SKU-level loyalty and substitutability reassured stakeholders that changes to category strategy would resonate well with customers.
A continuous improvement framework was central to our strategy. We simultaneously designed and deployed new processes, enabling iterative refinements and extensions to additional categories. A robust change management commitment from the start accelerated early successes and sustained momentum.
Strengthening Infrastructure and Collaborative Efforts
To support the refined merchandising model, RetailCo enhanced its support network by installing and onboarding new national merchants and advancing tools for both category management and value tracking. This enabled more effective supplier negotiations and brought other functional areas into the fold—including private label, replenishment, and supply chain—to ensure robust cross-functional collaboration.
Significant Gains and Sustainable Advantages
RetailCo’s transition to a more streamlined and formalised approach eliminated unnecessary complexity, integrating deep category knowledge and functional expertise into merchandising decisions and supplier negotiations without sacrificing local market acumen. The data-driven model fostered better, faster decision-making; enhanced partnerships with suppliers; and maintained competitive pricing.
This strategic overhaul resulted in a substantial increase in performance: sales in categories managed under the new model outperformed those in comparable categories by over 110 basis points. Moreover, there was an increase in supplier investment by more than 5%, with the savings reinvested back into the business. Beyond immediate financial gains, the strategy also led to a more skilled merchant team, a unified source of truth in data, and a sustained commitment to category innovation. Ultimately, this transformation showed that RetailCo could successfully balance local relevance with national scale, achieving significant improvements in both areas.
*We take our clients’ confidentiality seriously; whilst names are changed, outcomes remain real.
