What Is Retail Velocity and Why Does It Matter?
If you're selling through retail partners, there's one metric that matters more than almost any other: velocity. Specifically, units per store per week (USPW). This single number determines whether you'll keep your shelf space, get expanded distribution, or find yourself discontinuedated.
Here's the thing about retail: shelf space is finite and expensive. Every retailer constantly evaluates which products earn their place on the shelf. Velocity is the primary metric they use to make those decisions.
Understanding your velocity—and knowing how to improve it—is fundamental to succeeding in retail.
How to Calculate Units Per Store Per Week
The formula for retail velocity is straightforward:
USPW = Total Units Sold ÷ Number of Stores ÷ Number of Weeks
Let's work through some examples to make this concrete.
Basic Calculation Example
You sold 12,000 units of your protein bars across 200 Target stores over 6 weeks.
USPW = 12,000 ÷ 200 ÷ 6 = 10.0 USPW
That's strong velocity—your protein bars are moving well at Target.
Accounting for Distribution Changes
Things get trickier when your store count changes during the measurement period. Say you started with 200 stores but expanded to 300 stores midway through a 6-week period.
In this case, you need to calculate "store weeks"—the total number of store-weeks your product was available:
- Weeks 1-3: 200 stores × 3 weeks = 600 store-weeks
- Weeks 4-6: 300 stores × 3 weeks = 900 store-weeks
- Total: 1,500 store-weeks
If you sold 18,000 units during this period:
USPW = 18,000 ÷ 1,500 = 12.0 USPW
Why ACV Distribution Matters
Not all stores sell equally. A Whole Foods in Manhattan generates far more volume than one in rural Vermont. This is why many retailers and brands look at velocity normalized by ACV (All Commodity Volume) distribution.
ACV measures what percentage of total grocery sales your product reaches. If you're in stores representing 50% ACV distribution, you're reaching half of all grocery spending. Velocity per ACV point helps you compare performance across different distribution footprints.
What Does Good Velocity Look Like?
Velocity benchmarks vary dramatically by category, retailer, and product type. A "good" velocity for premium chocolate is different from a "good" velocity for bottled water.
General Benchmarks
While specific targets vary, here are rough guidelines:
- Below 1.0 USPW: You're at risk of discontinuation. Most retailers won't keep items on shelf that move less than one unit per store per week.
- 1.0-2.0 USPW: Acceptable for specialty or niche items, but you're not a strong performer.
- 2.0-5.0 USPW: Solid performance. You're earning your shelf space.
- 5.0-10.0 USPW: Strong performer. You may be in line for expanded distribution or better shelf placement.
- 10.0+ USPW: You're a category leader. Retailers want more of you.
Category-Specific Context
These benchmarks shift based on your category:
High-velocity categories (beverages, snacks, dairy): Expectations are higher. 5+ USPW might be the minimum for maintaining distribution.
Low-velocity categories (specialty foods, supplements): 1-2 USPW might be perfectly acceptable because the category itself moves slowly.
Impulse vs. planned purchases: Products bought on impulse typically need higher velocity because they depend on visibility and convenient placement. Planned purchases can survive with lower velocity because customers seek them out.
Retailer Expectations
Different retailers have different thresholds:
- Conventional grocery: Often operates on tight margins with limited shelf space. Velocity expectations tend to be higher.
- Natural/specialty: May accept lower velocity for unique or mission-driven products that fit their brand positioning.
- Mass retailers: High expectations due to enormous store traffic and competitive shelf space.
- Club stores: Velocity requirements can be extremely high due to limited SKU counts and bulk purchasing.
What Affects Your Velocity?
Velocity isn't random—it's driven by specific factors you can influence.
Shelf Placement
Where your product sits on the shelf has enormous impact. Products at eye level typically outsell products on the bottom shelf by 2-3x. End caps and promotional displays can drive 5-10x normal velocity during a campaign.
If your velocity is below expectations, your first question should be: where exactly is my product on the shelf?
Pricing and Promotions
Price point matters, and promotional activity drives velocity spikes. Brands that never promote tend to have steady but modest velocity. Brands with regular promotional calendars see velocity spikes that boost their overall numbers.
That said, be careful with over-promoting. Retailers watch your non-promoted velocity too. If you only move product when it's on deal, that's a red flag.
Marketing and Awareness
Velocity improves when customers know to look for your product. This is where your DTC marketing, social media presence, and brand building pay off in retail. Customers who discover you online then look for you in stores.
Distribution Quality
Not all distribution is equal. Being in 500 stores doesn't help if they're 500 low-traffic locations. The specific stores you're in matter as much as the total count.
Work with your buyer to ensure you're in stores where your target customer actually shops.
In-Stock Rate
This is the hidden velocity killer. If your product is out of stock 20% of the time, your measured velocity will be 20% lower than your true demand. Worse, customers who can't find you may switch to competitors permanently.
Track your in-stock rates obsessively. Every stockout is lost velocity.
How to Improve Your Velocity
If your velocity isn't where it needs to be, here's how to move the needle.
Audit Your Shelf Position
Get into stores and see where your product actually sits. Take photos. Compare to competitors. If you're buried on a bottom shelf or lost in a crowded section, work with your buyer on improving placement.
Some retailers charge for premium placement, and it's often worth the investment if it drives meaningful velocity improvement.
Invest in Shopper Marketing
In-store marketing drives discovery and purchase. Options include:
- Shelf talkers and price cards
- Sampling programs
- Coupon booklets and tear pads
- End cap or secondary displays
- Cross-merchandising with complementary products
The key is driving trial. Once customers try your product and like it, repeat purchases follow.
Improve Your In-Stock Rate
Work with your demand planner to ensure you're never out of stock at the DC or store level. This means:
- Building appropriate safety stock
- Responding quickly to reorder signals
- Communicating proactively about production issues
- Monitoring store-level inventory when possible
A 5% improvement in in-stock rate can translate directly to 5% higher velocity.
Optimize Your Assortment
If you have multiple SKUs, not all will perform equally. Look at velocity by SKU and consider:
- Discontinuing true underperformers to make room for better items
- Combining slow-movers into variety packs
- Adjusting facings to give more space to fast-movers
Sometimes the best way to improve average velocity is to remove the items dragging it down.
Key Takeaways
- Retail velocity (USPW) is the primary metric retailers use to evaluate your shelf performance
- Calculate velocity by dividing units sold by stores by weeks, accounting for distribution changes
- Velocity benchmarks vary by category and retailer—know your specific thresholds
- Shelf placement, pricing, marketing, and in-stock rates all drive velocity
- Improving velocity requires active investment in shopper marketing and operational excellence
Frequently Asked Questions
What is a good units per store per week for CPG products?
It depends on your category, but as a general rule, anything below 1.0 USPW puts you at risk of discontinuation. Solid performers typically achieve 2-5 USPW, while category leaders often exceed 10 USPW. High-velocity categories like beverages may have higher thresholds.
How do retailers track velocity?
Retailers track velocity through their point-of-sale systems, which capture every transaction. Most retailers provide this data to vendors through portals or syndicated data services like Nielsen or IRI. Some retailers share weekly data; others only provide monthly or quarterly reports.
Why did my velocity drop after expanding distribution?
When you expand to new stores, those stores start at zero velocity and need time to build sales. Your overall USPW may temporarily drop because you're dividing by more stores. This is normal—track velocity in comparable stores (existing distribution) separately from new stores to see true trends.
How does velocity affect my negotiating power with retailers?
High velocity gives you leverage. If you're a top performer in your category, you can negotiate for better shelf placement, more facings, promotional opportunities, and potentially better terms. Low velocity puts you on the defensive and may limit your ability to expand or maintain distribution.
Should I sacrifice margin for higher velocity?
Sometimes, but carefully. Deep discounting can inflate velocity temporarily, but retailers also watch your non-promoted sales. If you can only move product on deal, that signals weak underlying demand. Invest in marketing that builds brand awareness rather than relying solely on price promotions.