General Merchandise/HBC

Achoo! Sniffle, Sniffle—‘Tis the Season for HBC

Making sense of the many brands, product sizes and forms

OAKBROOK TERRACE, Ill. -- No one can predict the severity of the flu season—not even the Centers for Disease Control—but most convenience stores can count on steady demand for cold and flu remedies over the next six months. Brand names used to rule the HBC aisle, especially in the convenience channel with limited shelf space. However, major brand supply shortages in recent years have rolled out the welcome mat for value alternatives in the convenience channel. Category managers have more options than ever—brand name or value/private label? Large-count package or trial size? Most popular items or the latest trend?

Cold and Flu medications

“A few years ago, it may have been common to see several brands and formulas (acetaminophen, ibuprofen, naproxen sodium) in different forms (caplets, tablets and liquid gels) and sizes, and at multiple price points, all to treat pain,” said April Elsinger, director of convenience marketing for Lil' Drug Store Products Inc. “Today, you are more likely to find a streamlined selection to satisfy the most common ailments in the most popular forms.”

With a few exceptions, the cold/flu segment has been a steady performer for the convenience channel. The primary categories are cold/allergy/sinus liquids and powder, cough drops, cough syrup and cold/allergy/sinus tablets. In the 52-week period ending Aug. 10, the most surprising changes occurred with cough syrup, which dropped 15.07% in dollar sales vs. a year ago, and sore throat remedy liquids, which rose 17.44%, according to IRI, a Chicago-based market research firm. Other categories showed only slight drops.

“Cough and cold is one of our top year-over-year categories,” said Ron Dunlap, category manager retail store, TA Operating LLC (TravelCenters of America), operating in 43 states and Canada. And while the Westlake, Ohio-based chain strives to streamline, it also relies on certain strategies to keep the category healthy, including offering a variety of package sizes and trial size options.

“We’ve added different size packs of the most common cough and cold items,” Dunlap said. “That way we supply what the customer wants—either a value by buying a larger-count pack, or a ‘need now’ by buying a smaller-count pack.” The chain also has seen demand for trial-size items and has added bins to accommodate more variety. TA’s most popular HBC set includes eight different products in trial-size bins.

Offering the smaller sizes in value brands also inspires “trade up” opportunities, said Elsinger. “For seasonal categories with relatively low-ring items, such as cough drops and lip balm that have been low-growth recently, we are encouraging our customers to find opportunities to trade consumers up with multipacks or unique offerings,” she said. For example, Lil’ Drug now offers Carmex Cherry Stick lip balm in a 2-pack with a “buy one get one half off” at a $2.99 price point vs. a single pack for $1.99.

TA uses product shippers to rotate promotion of different products every two months. Dunlap said the product shippers typically perform well and the left-over shipper items also are typically in-line.

While product variety offers consumers more choices, Elsinger also feels strongly about simplifying the set. “We believe too many choices for consumers can lead to confusion, frustration and ultimately a non-decision and non-purchase. Particularly for OTC/HBC in c-stores, having a smart mix of products available and not necessarily the largest selection of products leads to success.”

Some stores are offering more value alternatives to compete with drug and dollar venues. “It’s more important than ever to offer the right mixes at smart prices,” Elsinger said. Supply issues from branded OTC items in recent years led to more availability of private-label options and, during shortages, consumers bought these products at the same rate as branded. And they continue to seek them out.

“The market share of private-label items for c-stores is generally much lower than it is for food, drug and mass channels. Therefore, while national brands still do rule, private label has room to grow for this channel,” Elsinger said. “We see these value alternatives as a great offering for c-stores, and we also see that shoppers are willing to trade up to larger sizes if value is offered.”

This post is sponsored by Associated Distributors


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