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The rotation is because they stock the product for which they can negotiate the best discount.

But as you say the 20k SKUs premium stores stock aren’t a necessity. They drive up the costs for the store and the price for the buyer all so the buyer has the feeling they bought something different, when many brands are anyway the same product under different labels.

The premium store 3 minutes from my home stocks 30 types of mineral water. Aldi and Lidl stock maybe 3 of those 30. That’s what 99% of people buy anyway.

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> That’s what 99% of people buy anyway

Until there's one less common thing you want. If you don't care much about flavour or have no taste in products then you can sub in any crap food or product.

I go to a particular supermarket because it has the tomatoes I like: they just can't be substituted. It also has an uncommon milk that is the only one I really like. The issue gets harder once you desire specific Deli foods.

How much of SKU selection is driven by individual consumer tastes? Some brand selection is driven by other causes.

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That’s fine, you’ll just need to walk 10min extra to the specialty/ethnic/Deli store which stocks that. Supply is proportional to the demand so you can’t expect every niche item to be sold right next to you. How many types of milk can every store stock just so everyone can see their niche preference 10 min walk from anywhere?

250k SKUs means everything anyone would ever want. But the distribution of the demand for those SKUs is very lopsided. 20k are what everyone buys. Another 20k are probably things almost nobody buys. So how could you have both high and low demand items spread equally through a city without creating waste? If everything needs to be 10-20 min from you then somewhere a store is sitting empty with barely any customers or a shelf isn’t touched by anyone. The logistics for stocking and supplying products almost nobody buys costs everyone else.