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Solid gains for HBC in 1993.

Grocery stores' health and beauty care departments ended 1993 with San upbeat record. Dollars advanced 3.9% to $13.8 billion, strong results compared with 1992's 1.6% gain. Optimism for 1994 may be warranted, as sales for the past fourth quarter gained 4.1 %.

Unit sales advanced 2.2% in 1993, slightly above the 1.8% gain achieved in 1992 and well above the flat sales recorded in 1991 and 1990.

That dollar sales grew at a greater rate than units is largely due to the fact that the national average weighted retail price in the department has advanced steadily the past few years. The average HBC price today is $2.82, up from $2.66 in 1990.

Higher average prices are particularly evident in the top gaining segments. Of the 30 top segments in 1993, 23 carried retails significantly above the HBC average. The top gaining segments averaged $3.64, 29% above the department average.

Another factor is an apparent gain in sales and distribution of higher priced items. Recent Rx-to-OTC switches and larger pack sizes, particularly some premium-priced hair care products, played a part in this gain.

Of all major categories, first aid led the parade with an 11% sales gain over 1992, when sales were flat. Absorbents was the top performing subcategory, with a brand of pure cotton squares and rounds scoring a dollar gain of 22%. Surgical dressings, a newcomer to the top gainers' list, posted a 14% sales increase, due to action among a few brands of pads, some of which are self-adhesive.

Children's adhesive bandages, a strong performer for two years now, posted an 18% gain. The items cater to the younger set with imprints of licensed characters and nontraditional colors such as fluorescent. The children's segment accounted for 16.5% of total adhesive bandage sales last year, up from 14.8% in 1992.

First aid antiseptics contributed substantially by gaining 20% in sales. The two primary factors are a line of children's products and private label. A condition-specific (bums, rashes, etc.) children's line of four items was introduced in January 1993, in packaging geared to children. Private label antiseptics, with sales up 57%, derived most of its growth from antibiotic lotions and ointments.

Cosmetics scored a big gain last year, up 8% in dollars, following flat sales the previous year. Since most supers lack the space to provide a comprehensive selection, the move is toward selectively stocking only the newest formulations and shades in color cosmetics. The 19% sales increase posted by mascaras came mostly from new items.

False nails was another top gaining segment. Its 17% dollar gain was largely due to new products and the growing trend toward professional nail products, which are moving into the mass market. These products have instant recognition with women who frequent nail salons and who appreciate the convenience of buying the items while grocery shopping.

Medications/health care, with $5.1 billion in grocery store sales, strengthened its position last year. The category's 7% dollar increase pushed its share of total HBC volume to 37.6%.

Product diversity and extensive assortment powered the category. Another major factor is the continuing trend toward self-medication and health awareness. Almost all Rx-to-OTC drugs enjoyed success as consumers self-treat to reduce costly doctor visits.

Herbal supplements achieved strong gains for the second consecutive year, posting a 70% sales increase in 1993. Most of the sales came from garlic and ginseng products, which are believed to offer health-maintaining properties, even though no accepted medical evidence exists and no specific claims can be made. Nevertheless, the category now accounts for 4.9% of all vitamin and tonic sales, up from 3.3% the previous year. The average price of these items last year was $7.39, a gain of $1.44 over 1992's average retail. The increase is caused in part by larger pack sizes, indicating consumers are willing to invest in the possibility of better health.

Vitamin E supplements, for which there is some scientific evidence supporting health-preserving anti-oxidant properties, also gained significantly in dollars (up 34%) and share (to 10.4% from 8.8% the previous year). Retails averaged $7.39, despite the fact that lower-priced private label items held a 52.6% dollar share of the category.

The anti-diarrheal category continues to be a top gainer, thanks to the 1988 OTC switch of loperimide, an effective drug ingredient. Since the drug's patent expired in early 1993, more brands have incorporated the drug into their formulations, resulting in a 21% sales gain for two years in a row. Private label has also been making inroads.

The diet meal replacement segment has taken a surprisingly strong upswing in sales, enjoying a 36% gain in sales last year. The principal factor was a new brand promising superior chocolate flavor. The segment's top brand also posted strong growth, due to its addition of new flavors and buy one, get one free promotional packs. Another popular line is a pediatric brand that includes a meal's worth of nutrition in one 8-ounce drink.

Medications/health care gained incremental volume from anti-flatulents. A segment of antacids, the line primarily contains the ingredient simethicone. One specialized brand contains enzymes that break down some of the complex sugars in gas-producing foods. This brand, along with other extensions from two prominent antacid brands, helped increase category sales by 38% last year.

Several foot care segments enjoyed rapid expansion in 1993. The greatest gain came from insoles, up 20%, due mainly to line extensions from a product line relaunch by the category's premier brand. Included in the relaunch were many premium priced insoles, helping push the category's average price to $3.26 last year, up from $2.55 in 1992. Athlete's foot preps experienced a 17% gain in dollars, stemming a larger pack size of an Rx-switch brand in 1990.

Artificial tears and ointments was a growth segment, posting a 23% gain. The items, which offer relief from chronic dry eyes due to the reduced body fluid production in later life, are benefiting from the aging population. The category's growth was fueled last year chiefly by two new brands, one from a prominent manufacturer of soft contact lenses.

Sales of oral care products advanced 1%, down sharply from 1992's 5% gain, which was driven by outstanding sales in toothbrushes and whiteners. The tooth whitener category continued its wild ride, advancing 78% in 1993 and matching its 1992 position as the No. 1 category sales gainer. Of special note is the average price of $6.90, which is down 59 cents from 1992, apparently from lower prices on many larger size SKUs. Bonus packs from the top selling brand pushed sales along.

Also performing well was the desensitizing dentifrice segment. Primarily used by senior citizens, the items help reduce sensitivity to temperature extremes and sweets caused by receding gums and exposed tooth roots. Most influential to this segment's 28% dollar advance was a line extension from a mass market brand that arrived in late 1992. Another successful item is a line extension from a major toothbrush manufacturer.

The baking soda dentifrice category continued its strong performance in 1993. The ingredient is showing up in more and more line extensions from the major brands, generating a 62% dollar growth last year and commanding 23% of dentifrice dollars.

HBC top gainers

(Percent Change 1993 vs. 1992 in grocery stores)
                                Dollar volume
Selected categories(*)             % increase
Total HBC                                3.9%
Tooth whiteners                           78%
Herbal supplements                         70

Women's replaceable razors
  and blades                               66
Baking soda dentifrices                    62
Anti-flatulents                            38
Meal supplements                           36
Diet meal replacements                     36
Vitamin E supplements                      34
Desensitizing dentifrices                  28

Blood glucose
  measurement strips                       24
Artificial tears and ointments             23
First aid absorbents                       22
Anti-diarrheals                            21
Women's hair color                         20
Foot care insoles                          20
First aid antiseptics                      20
Mascaras                                   19
Children's adhesive bandages               18
False nails                                17
Athlete's foot preps                       17
Corn/callus/bunion preps                   17
Medicated powders                          16
Lip medications                            16

(*) Segments generating $12 million or more during the year. Source: Towne-Oller & Associates, subsidiary of Information Resources Inc.
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Title Annotation:supermarkets' health and beauty care product sales
Author:Gurin, Kenneth
Publication:Progressive Grocer
Date:Apr 1, 1994
Previous Article:Category switching expands GM/HBC's role.
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