Like many things, sales of health-and-beauty-care (HBC) products, which spiked in convenience stores during the COVID-19 pandemic, are returning to normal.
But while pandemic-related purchases are slowing down, other items in the HBC category are performing well. Their gains are being masked, though, by the unusual spike and decline in items such as hand sanitizer, masks and COVID test kits, said Scott Love, senior vice president of retail client solutions at IRI, Chicago.
“[The decline in pandemic-related purchases is] offsetting a lot of other stuff that’s doing much better, and that’s kind of the challenge,” Love said. “Things like antiperspirant deodorant is up double digits—18.6% versus a year ago on the beauty side—and that’s being washed out from the big declines on hand sanitizers.”
Hand sanitizer sales are half of what they were last year, and face masks and COVID tests are also seeing sharp declines, he said.
COVID-related products across HBC are down nearly 71% year to date, according to IRI data for the 52 weeks ending on Sept. 25. They were up 318%, though, when looking at the three-year period from 2019 to 2022. Looking at the past year, the health category is up 2.2%, which translates to $1.7 billion in c-store sales, IRI data shows. Beauty care, a much smaller category, is down 8% or $126 million in dollar sales in 2022, according to IRI. Both health and beauty are lagging the total inside c-store sales growth, which is up 2.8%.
“Things like antiperspirant deodorant is up double digits... and that’s being washed out from the big declines on hand sanitizers.”
The purchase cycle for items in HBC segments has increased, meaning there are more days, on average, before a consumer returns for his or her next purchase.
Whether the consumer is shopping in the c-store channel, or the mass or grocery channel, though, affects the types of trips. In c-stores, there are more fill-in trips, while grocery and mass channels are more often planned occurrences, Love said.
“In convenience, you tend to get one, maybe two brands or sizes. Sizes are limited, and assortment is much more limited,” he said. “The total space dedicated [to HBC] in a c-store is 5% or 10% of what you would see in other outlets. It’s a much more compressed assortment. The sizes are much smaller because they’re meeting a need that is instant. You’re not going to go buy 64-ounce shampoo from a c-store; you’re going to buy something that you use for one or two days, and then you go buy it at other outlets.”
The HBC category is a driver of unplanned trips, as customers stop in to meet immediate needs, said Scott Breisinger, national broker manager of c-stores at GlaxoSmithkline Consumer Healthcare, Philadelphia.
“We make Tums,” he said. “In [grocery and mass retailers], they’re 60-count, 100-count, 170-count or 200-count. In convenience, they’re single rolls: 12 [or eight per] roll. They’re smaller. They’re all about, ‘I’m driving down the road, and I have a headache I have to stop right now’ .”
Vicks is also innovating with sizes relevant to fill-in shoppers.
“Vicks now offers a unique product in DayQuil and NyQuil 1-ounce shots,” said George Main, director of marketing at Core-Mark International, Westlake, Texas. “This small size allows the liquid cough and cold product to be portable, and that’s preferable to many people over a pill or caplet.”
In the winter, high-priced products like pain and cold-and-flu medicines perform well, Love said. Products that boost energy are also performing well.
“Items that address better sleep and increased energy are trending right now, and we’re seeing more of those products coming to market in the form of convenient shots and gummies,” says Main.
The out-of-stock problems seen in nearly every category through the pandemic haven’t been as much of a problem for HBC, Love says, aside from pandemic-related products.
“There isn’t a limitation there,” he said. “They’re kind of standard items that are fill-in trips.”
Main, contrarily, says that demand is outpacing supply, and manufacturers are focusing on their existing lines.
“Feminine care is experiencing significant out-of-stocks with little relief in sight,” Main said. “But many other items already recovered from production issues and are back in stock or on their way to recovery.”
“Items that address better sleep and increased energy are trending.”
With inflation, consumers have been down-shifting from premium brands to mainstream or value brands, such as private labels, says Love.
“Private label growth, overall, from a total store basis, our MULO (multi-outlet) universe, is outpacing convenience on a total store basis,” he says. “However, private-label growth is outpacing MULO growth across the total store.”
In health and beauty care, private label is limited because of the lack of space and assortment. Beauty care is a smaller category but has more private-label options than health products. Private-label beauty items hold 9.7% in dollar share of the product group when compared with the national brand, and health items hold 3.8%.
And there’s an art to pricing private label vs. a major brand.
“To be successful with private label, the pricing strategy needs to be a gap of about 20% lower than name brand,” says Jennifer Childers, data analyst at McLane Co. Inc., Temple, Texas. “Research has shown that any more or less, the customer will feel price-gouged on the name brand or will not have trust in the private label.”