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Convenience Store Decisions, HBC Category March 2012

Health and Beauty Category

Pittsburgh-based InRhythm, Inc.’s “C-Metrics Projected Convenience Store Sales and Distribution” report, which tracks convenience store category sales on a weekly basis, projects that overall sales in the health and beauty category (HBC) for 13 weeks ending February 11, 2012 will be flat. However, one category that did experience some growth was analgesics.

Analgesics, which the report projects will account for 21.1 percent of total category dollar share during this period, increased by 1.7 share points. But, cough and cold remedies’ 16.6 percent HBC dollar share reflected a 1.9 share points decrease and stomach remedies, 7.2 percent of the category, were down by 1.3 share points.

Kera Smith, merchandising specialist for Emmaus, Pennsylvania-based Top Star Express convenience stores, says her company’s overall OTC sales have increased 10 percent from last year. She explains that the growth has come from trial size rather than full size products.

“Though our full size OTC products are flat in sales, trial size sales increased by 16% trial size sales increased by 16%,” Smith says. “We feel price is a contributing factor to the flat full size sales.”

Top Star’s category strategy, she explains, is to “stock the top full size SKU’s to satisfy the customer who looks for the larger quantity while also offering an even broader variety in our trial size products.” She maintains that the company views this is one the keys to continued growth.

 

The chain’s HBC sales have gone up 2% since last year and “we see the category continuing to increase,” she says.

“We don’t feel it will be as significant as the OTC growth, but there is opportunity within the category,” Smith says.

She explains that HBC accounts for .42 percent of store sales (excluding gas, lottery tickets or bus tickets). The OTC subset of that category brings in .18 percent of those sales.

The company’s top subcategories for growth last year were feminine products (23 percent), family planning (22 percent), cough and cold (21 percent) and analgesics (19 percent).

“We expect analgesics to continue to grow for us in the upcoming year,” she says. “We think there is a lot of opportunity within the subcategory so we will be adding six more [trial size] SKUs in 2012.”

Smith attributes a large part of Top Star’s HBC success to “our partnerships with our vendors.”

“Convenience Valet, for example, has helped us POG our stores, not only for their products, but for the entire category as well as promptly informing us about recalls and manufacturing issues and giving us temporary replacement item suggestions to ensure that our shelves stay fully stocked even if there are manufacturing issues that are out of our control,” she says.

InRhythm reports that the skincare/external care accounts for 10.5 percent of total HBC category dollar share, grooming aids 5.1 percent. And within these subsets, Packaged Facts research firm predicts that consumers will continue their quest for natural.

“The U.S. consumer market for natural and organic skincare, hair care, and makeup-which during 2005 to 2010 boomed 61 percent to $7.7 billion-could top $11.0 billion as of 2016,” says the company in its “Natural and Organic Personal Care Products in the U.S” report published last December. “Already natural HBC is such a solid performer, that it can be considered a component of the mainstream personal care market.”

“Green” consumers are more receptive [to these products], even to the point of remaining loyal to natural HBC brands in the recession of 2008-2009, the report says.

 

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Written by cvaletAdmin