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Comprising 34.4% of all HBC sales, the medications category posted a 2.73% increase in 1995. Why the somewhat lackluster growth in sales, given the huge gain (17.1%) by antacids? The micro wars raging within some subcategories--particularly analgesics and cold products--counteracted other gains.

The continuing channel tug-of-war among mass, drug and grocery played a strong role in keeping supermarket growth in check. In categories like analgesics and others, mass discounters continued to grab sales at record paces. In the internal analgesic category, this contributed to the 2.37% loss posted by supermarkets. Consumers faced with a growing choice of where to purchase these products have begun looking at cost as an overriding factor.

Although analgesic sales in supermarkets declined in 1995, that may be a bit misleading, given the fact that many of the new products, particularly a number of Rx-OTC switch items, didn't hit the shelves until late in the year.

"Consumers today are much more sophisticated than ever," says Kellie McLaughlin, manager of public affairs for Whitehall-Robins, Madison, N.J. "They take a variety of analgesic products and typically choose from a broad selection that may include aspirin, ketoprophen, acetaminophen or ibuprofen. This has resulted in a much more competitive marketplace. We saw that in 1996 with the Advil and Tylenol ad campaign."

New strides in external analgesics helped push this segment of the medications category to a 4.4% growth in 1995. However, much of that growth came from products carrying higher price tags. This is evidenced by the fact that unit sales declined last year.

Thanks to products such as the Pain Patch from the Mentholatum Co., Buffalo, N.Y., this mature market has had some life shot into it. Unlike other external analgesics, the Pain Patch is designed to relieve pain for hours without the odor of topical remedies. "For a grocery retailer to be a strong player in this category, you need to offer a variety of internal and external analgesic products that attract a broad range of users," says a spokesman from Mentholatum.

Demographic changes should keep this category strong. "The need for products like these will continue to grow as the population ages and those getting arthritis, the largest user group of external analgesics, continue to rise," says the company.

Overall, the best news in the medications category are the Rx-OTC switch items. There was no greater evidence of the potential of switch products than antacids. Clearly the gain in 1995 reflects the launch of Pepcid AC in April and Tagamet HB in August. "Add to this Zantac 75 and the OTC version of Axid from American Home Products, which was launched this year, and you have more attention on the category," says Tom Quinn, vice president of sales, Warner-Wellcome, Parsippany, N.J., maker of Zantac 75. "You have a lot more promotion, advertising and more opportunity for consumers to hear about H2s this year. Given this, I fully expect the category to experience much larger gains in 1996."

As more prescriptions switch to over-the-counter versions, retailers seem to be better prepared to promote them. "Getting product on the store shelves early and merchandising them in multiple displays has helped heighten the launch," says Quinn. "In the time Zantac 75 has been launched, while mass started out with an edge from the first week, after the first seven weeks, the food channel gained in share while mass slipped. Supermarket retailers gave faster, broader distribution, and displayed the product throughout the store vs. prior launches. The key to remember is that since the package is compact, the food channel has the opportunity to leverage off multiple locations in both food and non-food departments to create more effective merchandising strategies."

Strong growth was also posted by vitamins, which gained 14.2%, on the heels of a 13.38% increase the previous year. While single-vitamin products may have been popular a year or two ago, sales have slowed to single-digit returns. To compete with the mega-brands, traditional single-vitamin marketers are reaching out to retailers with category management strategies. "It's vital to look at growing an individual business in concert with helping the retailer grow the whole category," says Andy Gray, director of marketing, Rexall Sundown, Boca Raton, Fla.

As the media continue to focus on self-care and the benefits derived from vitamins, herbs and other supplements, retailers, too, have caught on and have begun offering more SKUs.

     Medications/health care            34.44% of HBC sales

                              1995           % of
                             volume         category       % change
                          ($ millions)       sales        95 vs. 94
Analgesics                    $974.16         22.31%        -1.89%
External                        73.15          1.68          4.40
Internal                       901.01         20.63         -2.37
Antacids                       385.78          8.84         17.10
Asthmatic remedies              21.42          0.49         -5.50
Cold products                1,206.29         27.63          0.95
Allergy & sinus remedies       786.05         18.01         -0.54
Cough drops                    135.58          3.11          3.90
Cough medications              129.25          2.96          5.70
Lip medications                 56.88          1.30          8.90
Nasal drops, inhalers, sprays   94.03          2.15         -1.10
All other cold products          4.50          0.10          0.10
Diarrhea remedies               53.84          1.23          1.40
Diet aids                      171.05          3.92        -18.44
Nutritional                    148.93          3.41        -19.50
Suppressants                    22.12          0.51        -10.42
Diuretics                        6.51          0.15          5.70
Ear care                        14.63          0.34         42.00
Eye care                       341.86          7.83          2.90
Contact lens preparations      251.78          5.77          2.10
Drops, wash                     90.08          2.06          5.20
Foot care                      118.32          2.71          1.10
Hemorrhoidals, suppositories,   62.24          1.43          0.90
Laxatives                      162.30          3.72         -2.70
Motion sickness                 10.07          0.23          9.10
Sedatives and stimulants        68.20          1.56         -1.80
Vitamins                       670.80         15.37         14.20
Wart removers                   12.30          0.28          9.20
All other medications & health  85.44          1.96         13.70
Category total              $4,365.21       100.00%          2.73%
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Copyright 1996 Gale, Cengage Learning. All rights reserved.

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Title Annotation:GM/HBC Magazine; 1996 Non-Foods Sales Manual; grocery stores' sales statistics for 1995
Author:Radice, Carol
Publication:Progressive Grocer
Date:Aug 1, 1996
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