Commentary From Our President
3 Steps to Boost HBC Performance
Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.
Unless you are highly focused on your Health & Beauty Care (HBC) department, you might think the department’s sales are satisfactory, especially considering the state of the economy.
But the reality is that supermarkets are losing HBC market share to other channels. This has been the case for some time. HBC is a multi-billion dollar business, and the loss of a single share point to other channels means hundreds of millions of profitable dollars are going elsewhere.
But if supermarkets focus on HBC, a real turnaround is attainable. Here are three steps toward reaching that goal.
Step 1: Private Label
Perhaps the biggest missed opportunity is a lagging emphasis in private label. This may seem contradictory but, the fact is that supermarkets with limited HBC private label assortments will usually achieve less than 5% penetration, while a full range of HBC private label should produce 12% penetration. Putting more effort behind private label supported by good “compare and save” signing will build overall HBC growth.
Step 2: Promotions and TPRs
Off-shelf feature promotions and TPRs are HBC musts. Again good signing moves merchandise. The rules of thumb are–TPRs without signing will sell three times normal shelf movement; TPRs with signs should generate six times the normal movement, while end cap features with an ad will sell 12 times more.
Step 3: SKU Optimization
SKU optimization means having the right items at the right time. Being first to market on new items by just one week can generate up to 3% sales improvement. New item cut-ins and planogram compliance can have an 8% benefit. Assortment voids create the equivalent negative impact of stockouts.
So here’s hoping supermarkets will regain their rightful HBC market share. It takes focus and commitment, but it’s well worth our attention. We should all protect the business we’ve worked so hard to build.
For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com