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Hot categories ignite leap forward.

Helped by superstores and combination units featuring extensive drug departments, health and beauty aids in supermarkets scored an impressive 10.8% dollar sales gain last year. This is far above the 4.7% increase recorded for all supermarket items and more than a full percentage point above the 9.7% increase HBA recorded in all grocery stores, including smaller units. Percent margin was measured at 26.82%.

Expanded sections in conventional stores played a role in HBA's rosy picture, along with such underlying factors as greater reliance on one-stop shopping by working women and heightened consumer interest in health and appearance. Among 10 major categories, cosmetics and medications and health care (spurred by big gains in vitamin sales) led the HBA advance.

New items continue to pour in, infusing vitality, but making schematics obsolete before the ink's hardly dry and putting intense pressure on shelf space and on buyers themselves. In at least three categories there's a virtual frenzy going on.

* In sanitary protection, the new item flood is likely to create widespread out-of-stocks.

* The Food and Drug administration's recent release of a former prescription-only drug to over-the-counter sales offers supers a chance to win a good share of a $250 million business.

* About 10 new brands have broken into shampoos since the first of the year, all of them backed by huge consumer advertising and promotional budgets.

Coping satisfactorily with this situation may be beyond the capacity of many companies' non-foods departments, especially those with predominately conventional stores. So this is a time for top management to take a keeper interest in health and beauty aids. Otherwise, sales will be lost and customers disappointed and very likely sharper competition will reap the harvest.

By finding ways to increase shelf space and to provide more help to overworked buyers and merchandisers, top management can turn problems into opportunities. Steady baby needs attracts important shoppers

Compared to dynamic categories like shampoo, baby care seems to be taking a nap. New item backed by big bucks in consumer advertising are not a hallmark of baby needs. But don't be fooled. The business is there, the profits are good and the customers are especially important.

The category, which includes bottles and nipples, registered a very satisfactory dollar sales advance of 9.7% last year. This is due in part to the fairly high number of babies born--3.6 million in 1983--and to the increasing usage of baby products among adults.

Baby shampoo, oils and powders are said to be purchased more for use by adults than by infants. A lot of advertising is aimed in this direction.

Among the items showing above-average growth are corn starch powders and baby cream.

Johnson & johnson gave National Baby Week a good push last spring by sponsoring a national baby photo contest. The HBA merchandiser for a Kroger division says he takes advantage of the event every year to tie in a dozen baby items, including disposable diapers, for the division's grocery ad. "We want to attract young mothers," he says.

Mothers are known to be good customers, especially now that so many have jobs outside the home. This increases the time pressure and inevitably swings them toward convenience foods, a high margin category. So a neat, well-stocked baby care section is a "must." HBA's 'beauty' wins more admirers

After posting a 23% gain in dollar sales in 1982, cosmetics (including bath products) continued to show up beautifully on the bottom line in 1983. Sales increased 26.47% to account for 3.6% of total HBA, exceeding first aid's share and nearly topping baby care's.

That's only part of the category's happy picture. Cosmetics' percent margin of 36.75% helped produce 4.9% of dollar margin of all-HBA or 36% more than its share of sales.

Merchandisers say cosmetics' rise in supermarkets has not reached its peak. More and bigger superstores and combos and further expansion of conventional stores' cosmetics displays assures the category of an even more visible presence in the future.

A.C. Nielsen says food outlets now hold 17% of the cosmetics business of the market held by food, drug and mass merchandiser (discount department) stores. That's nearly double the 9% share food stores had in 1977. Since mass merchandisers also increased their share since 1977, it's apparent that food's share has come at the expense of drug stores.

While larger departments have played a major role in supermarkets' success with cosmetics, handsome black and silver fixtures, introduced in 1981, are also certainly a factor and some HBA merchandisers contend that the fixtures are the key.

But an even more compelling reason for the added shoppers is that there are now millions of working women, who use more cosmetics than their stay-at-home sisters and who seek the convenience of one-stop shopping.

Among product trends, powdered eye shadow continues to grow, particularly in kits featuring several shades; moisturizers are fully established in make-up; and softer, more sophisticated colors like lilac and orchid are appearing in lipstick and nail polish.

Increased promotion is now a hallmark of supers' cosmetics merchandising. Advertised features are often centered on prepacks, but advertising a single brand at a discount for a short period is becoming an increasing used device. Reductions of 10% to 25% are partially, if not fully, compensated by some manufacturers' allowances.
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Publication:Progressive Grocer
Date:Jul 1, 1984
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