Breathing New Life into Supermarket HBC

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

Today’s HBC and GM categories offer premium, mainstream and economy brands.  But it’s the growth rate of private label brands, compared to national brands, which have created a sea of change in sales for retailers.

Whether it’s the “new normal” or a sign of the current economic climate, private label brand growth is outpacing national brand growth by huge margins.  Private label brands increased by 10% vs. only 2% for national brands in 2009.  And Wal-Mart, the bell-weather of retail, has set their private label target at 40% by the year 2012.  Last year private label products reached 29% of center store sales.

National brands are fighting hard to win back consumers, but it won’t be easy.  Limited Assortment Stores and Dollar Stores are growing. Value tiered products for price conscious shoppers continue to expand and global sourcing is expected to increase at record levels in the foreseeable future. A recent consumer survey showed 70% of shoppers view private label brand quality equal to national brands. As one chain executive put it, “there’s no question that the economy has changed the psyche of our customers.”

So how are the national brand manufacturers likely to respond?

The strategies that national brand consumer product manufacturers are most likely to implement include; driving efficiency to lower product costs, promoting key brands to achieve sharper competitive retail prices, redeploying marketing funds for greater consumer value and maintaining a competitive advantage through innovation.

The competitive advantage for most national brand manufacturers is to invest in R&D in order to generate product innovation.  Traditionally, private label manufacturers have been less innovative, but very good as fast followers.  So how will national brands fight back?  Expect to see more new product introductions, stronger promotions and increased market funding. With private label’s momentum, national brands will have to fight hard to recapture market share.   Hopefully, this will be an opportunity for healthy growth to include HBC and GM categories.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Breathing New Life into Supermarket HBC

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

Has HBC lost its edge in supermarkets???

Have fresh and prepared foods taken over management focus while competition from chain drug and mass merchants grows tougher?

How much has our down economy impacted HBC in supermarkets?

These questions and others are making all of us take a hard look at ways to restore HBC’s rightful place in supermarkets.  It’s important reflection worthy of our attention and priority.

Progress begins with leadership and by spreading the realization that the HBC department is exceedingly important to overall store success.  This can start by identifying HBC success: showing sales and profit contribution, developing ongoing communication with store managers, non-food managers and supervisors and generating incentives for top performers at store-level.  Rethinking strategies while the economy is soft includes changing assortments by focusing on items that sell best.   Facings of smaller sizes costing less can be expanded with more space devoted to lower priced items and private label HBC.

Lowering price points on key items with the highest consumer repurchase frequency and assuring competitive retails with other outlets are critical.  Since top sellers create price impression, HBC should follow the same mantra as grocery: “A fast nickel is still better than a slow dime.” TPRs are a standard in virtually every HBC category, supported by impact signing.  Shoppers are always looking for specials; so let’s be sure that shoppers can see that the HBC department is loaded with value.  And of course, we want our HBC endcaps to show an element of décor that sets it apart from Grocery.  A poorly merchandised or unattractive endcap diminishes the impact of the department and sends a weak signal to shoppers.  Attractive, high impact HBC endcaps, deliver a strong price image. Other ways to breathe new life into Supermarket HBC include: micro marketing to customer segments such as catering to seniors, male shoppers and ethnic populations; cross merchandising between departments; optimizing checkout space, focusing on nutrition and wellness and early planning for major events.

It’s a classic story of renewal.  Creating a powerful look by improving merchandising will boost HBC performance and generate results that can be very different.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Make HBC Your #1 New Year’s Resolution

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

Here are TEN reasons why management should make HBC its top priority on the New Year’s Resolution To Do list.

1. PROVING ITS WORTH. If ever a store department proved itself worthy of confidence, it’s HBC.  During the Flu Epidemic in 2009, those supermarkets who stepped up to the HBC plate, increased sales while fulfilling their obligation to customers by stocking needed products in depth and providing good value.
2. HIGH PROFITS. Progressive Grocer published a Net Profit Study in which HBC’s contribution to store net profit far exceeded its share of sales.  Retail prices and percent gross profit are higher than most other store products.  The small size of most HBC items elevates the sales/margin per lin. ft. measurement.  HBC needs no refrigeration and has no spoilage expense.
3. EXCELLENT GROWTH.  Regardless of the recession, HBC unit sales promise strong future growth.  The department is underpinned by both nutritional and medical needs of the aging U.S. population. It’s estimated that in ten years, one out of three households will be headed by someone over the age of 62. Seniors have head to toe HBC needs, from hair coloring to eye glasses to corn pads and everything in between–vitamins, digestive remedies and pain relievers.
4. MORE NEW ITEMS. HBC is extremely dynamic, with more new items, new categories and new brands. Innovation, new formulations and advances in technology are all commonplace in HBC.
5. TRAFFIC BUILDING POWER.  While all HBC wanted items may not appear on everyone’s shopping list, some are in everyone’s mind. Oral care, shampoo and deodorants are used every day by practically everyone.  Few other products in the store can make that claim.
6. MAJOR SUPPLIERS. The number of major suppliers producing HBC products is formidable and includes–  Unilever, Procter & Gamble, Johnson & Johnson, Colgate-Palmolive, Bayer, Beiersdorf, Bic, Dial, GlaxoSmithKline, Kimberly-Clark, Novartis, Revlon, Schering-Plough, 3M, Wyeth.  Advertising, promotion, marketing and product development, represents billions invested by the HBC suppliers, year after year.
7. NATURAL & WELLNESS.  A good nutritional/wellness program with natural HBC products is a growth engine for the HBC department. Giving HBC more support is one of the clearest ways to express to shoppers your stores’ commitment to green, eco-friendly, natural and wellness programs.
8. POLITICAL SUPPORT.  Health care is a major domestic issue. Health Care products within the HBC departments are most likely to be involved in whatever happens to health care.  So, HBC departments should look sharp and be aggressively priced.
9. PRIVATE LABEL.  Private Label outperformed national brands in 2009 and found a new and bigger home in virtually every category segment.  Embrace Private Label to help transform your HBC categories.
10. MAKING HBC. The Food Channel represents 32.7% of a $41.2 billion HBC market.  Not too bad, but it could be better.  Making HBC your #1 New Years Resolution will create a Happier New Year for all!!

Wishing you the very best New Year in 2010.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

This Holiday Season, Think Positive

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

What’s to be merry about this holiday season?  If you read the headlines, there‘s not much space for merriment.  With the economy still lagging, heavy unemployment and home foreclosures, supermarkets are facing even more challenges.

Wal-Mart and Target are both expanding their food offerings. Target has set a goal of expanded grocery and perishables in 350 more of its discount stores throughout 2010, following encouraging sales results at the first 108 stores with the program.

Walgreens and CVS continue to expand their grocery “consumables” while membership clubs, led by Cosco’s  550 stores, are pushing deeper into food, even accepting food stamps for the first time.  Family Dollar Stores are expanding their food offerings under an aggressive ad campaign.

However, there is a bright side.  The economy’s picking up a bit, banks are making business loans again, and the mood of the general public, while still not entirely optimistic, is more upbeat.  People are saying “the worst seems to be over.”

Supermarkets continue to drive larger customer counts with more people preparing meals at home.

And supermarkets continue to dominate in highly popular departments that provide them with a competitive edge.   Examples include:

• Service delis – practically none of the other classes of trade can boast service deli departments.
• Fresh meat and produce – are not found in chain drug or dollar stores.
• Service bakeries – provide exceptional appeal in combating other competitors.

But perhaps the greatest competitive advantage for supermarkets is through innovation.  Finding new ways to promote and merchandise include better health/nutrition/wellness programs, philanthropic endeavors and creative technologies.

Examples found in the pages of Supermarket News include a focus on Non-foods:

• Weekly specials available via a free Apple iPhone – enabling customers to see what’s for sale in real time.
• “Give at Home for the Holidays” promotions – where shoppers adopting a dog or cat will receive a $50 Gift Card toward purchase of pet supplies.
• “Courage Cards for the Troops” – which sends holiday greeting cards to local service men and women.
• 1,100 bicycles donated to fourth-grade students who were nominated by teachers for being outstanding role models in the classroom.
• Rewarding customers checking out with reusable bags with a $1-off coupon.
• Black Friday promotions with a stream of hot deals displayed on Facebook and Twitter with featured items including a 42-in. plasma TV, digital cameras and Huggies diapers.
• Devoting more ad space to Pharmacy, HBC and General Merchandise with flu testing and wellness promotions.

The spirit of the season can enhance the spirit of competition, which keeps us all going and growing.  So “this holiday season, let’s think positive.”

With cheerful BEST WISHES and HAPPY HOLIDAYS to all our supermarket friends and their families; it’s still the most wonderful time of the year!

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Fighting the Flu with an All-Out Merchandising Effort

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

The “common cold,” has always been a force behind the cough and cold department in supermarkets.  But today, the flu season is loaded with more urgency and a wider assortment of items to help an increasingly anxious public.

In addition to the seasonal flu, the main worry now is a new strain that threatens more Americans with concerns that the Swine Flu or H1N1, could morph into an even more dangerous form later this year.

In the interim, retailers must do what they can to offer products that will diminish the possibility of catching the virus and help families cope with the virus if contracted.

The New York Times pointed out in a recent editorial that, while there’s no reason to panic, people should take normal precautions, including washing hands, restraining their coughs and staying home when they are sick.  That’s probably good advice, but omits mentioning the many flu-related products that have already accelerated in sales demand.

For swine flu, those with young children, as well as young adults 25 and younger, are more at risk. Seniors 60 and up are thought to be less at risk, having been ‘Inoculated’ through exposure to flu viruses in the past.

Our own reports find that cough & cold sales are running several times above the average vs. this time last year, and hand sanitizer sales are so heavy that it’s tough to stay in stock.  Besides the obvious lines of cough and cold medicines–augmented these days by natural, private label and homeopathic items increasingly aimed at children–the list of flu-fighters features a wide range of HBC product. They extend from vitamins to lip medications, soaps, to pain killers and sleep aids.  In General Merchandise, hot items include surgical masks and latex gloves.

The grocery aisle is also seeing bigger sales gains with facial tissues, liquid bleach and spray disinfectants. Many other anti-flu friends are found in a wide range of products that fit into the wellness category.  In this group are fresh and prepared fruits and vegetables, vitamin-enhanced drinks (including milk with vitamin D), breakfast cereals, yogurt and nutrition bars. In fact, under a Wellness flag including a Good Nutrition banner, Grocery has a multitude of flu-fighters, literally from soup to nuts.

And herein lies a test of store flexibility between departments.  Specifically, we’re referring to cross-merchandising, chiefly between GM/HBC, grocery and perishables.

Considering the impact of  this year’s flu season, it would not seem out of bounds to declare an all out cross- merchandising offensive in displaying flu-related HBC items tied into grocery endcaps with  floorstands, power panels and shelf extenders.

What better way to inform shoppers that we care, than by supporting them with a flu-fighting crusade that demonstrates we are fighting the flu with an all-out merchandising effort!

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Holiday Merchandising

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

Thank goodness, there’s finally some sunshine peeking through these tough economic times.

Despite the unsettling statistics on joblessness and the unusually cold and wet summer, the good news is that the holiday season is different.  It’s not dependent on weather.  During the festive holiday season, shoppers are joyful, generous and are ready to buy.

A national survey of 1,000 households by Information Resources Inc. (IRI), indicates that this year’s holiday shopping will improve.  Simply put, consumers are more optimistic.  Some specific finds from the survey:

• Matching quality to name brands (60%) remains a leading reason for switching to private label.
• Ninety-two percent of consumers will be doing their holiday food shopping at grocery stores, based on sales and discounts, product selection and variety of items in stock.
• More than 90% of shoppers are making gift-giving a priority, up nearly three percentage points from last year.
• More than 98% of shoppers will make spending time with family a priority at the holiday season, and 93% of consumers’ holiday plans include getting together with family and friends over the dinner table and at parties.

So, things are looking up for supermarkets for this coming season.  But what about non-foods?  The answer is simply that the success of supermarket non-foods during the holidays will depend on what retailers decide to do.

Opportunities include:

STOCKING STUFFERS: Most items in HBC and GM are suitable for promotion.  In GM, pet supplies, magazines/books, soft goods, stationery and housewares are all proven winners.  For HBC, hair care, skin care items (including men’s shaving and toiletries) are perfect for gift-giving.  Even toothpaste or toothbrushes can be good stocking stuffers.

DRESS UP THE HBC ENDCAPS: With the Christmas spirit, spreading holly decor, tinsels and garlands, and holiday-themed signs, on HBC and GM endcaps will stimulate impulse purchases and draw more shoppers into the department.

NON-FOOD CHRISTMAS NEEDS—Greeting cards, gift-wrapping, scotch tape, mailers, serving trays and platters, are just a few of the supermarket offerings that consumers will need for the holidays. Stationery items like wrapping paper, boxes, tapes, gift cards and bags, deserve special visibility on endcaps, shelf extenders and clipstrips.  Of course, holiday meals call for cooking and baking items with additional shelf space and floorstands.

BUT THE KEY, as always, is merchandising and promotion. Beyond good selection, competitive pricing and strong feature items, placement of special displays, signing and special effects can make a big difference in optimizing non-food sales during the holiday season.

So as the big season approaches, get into the Holiday Spirit early this year with non-foods.  It’s a huge opportunity that can overtake some tough economic times.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

A Tribute to my Dad, Frank Sleeper

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

On Thursday, August 27, 2009 my Dad, and the founder of Imperial Distributors, passed away at the age of 95. While we are sad that we will no longer see his smiling face or be cheered by his optimism, we celebrate his life and the legacy he left his family, friends, and all of us at Imperial Distributors.

Like so many others who grew up in the throes of the Great Depression, Frank Sleeper was desperate to find a way to make a living. Fresh out of high school in 1932, he decided to assemble first-aid kits containing iodine, bandages, adhesive tape and aspirin. He traveled throughout New England selling his not-for-resale kits to gas stations, restaurants and mom-and-pop grocery stores. Little did he know he had taken the first step toward becoming a pioneer in non-foods distribution.

Much has changed in our industry since those early days, but much remains the same. Imperial continues to follow his example by valuing hard work above all, providing great customer service, and treating everyone with respect.  And perhaps most important of all, Dad’s warmth and compassion extended to everyone he touched. The Imperial family honors his memory by carrying on these enduring values he embraced throughout his life. 

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

What Men Want?  A Look at Men’s Grooming

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

Times have changed.  It’s no longer considered effeminate for men to use body wash, skin lotion or body sprays. And the trend is building the HBC business.  Men’s grooming is a big multi-billion-dollar market with solid growth.

Market data shows that men today are amenable to products they might have once scorned. And it’s not only a matter of attitude; it’s also a matter of demographics and good health.  Older men, whose numbers are growing faster than other groups, are buying products for skin protection that help slow the body’s aging process.  Younger men, many of them in their teens, are looking to smell good and keep clean with the help of new body sprays and bathing gels.
   
Men’s Care items–in categories such as skin care, deodorants, bathing gels, etc., are building on the Shaving Needs business, the king pin of the Men’s Grooming category.  Today, even the shaving category, has changed with the proliferation of new high tech shaving products.

Another anomaly that has strengthened the men’s category is men’s hair coloring. Led by Combe’s Just for Men, hair coloring has established itself as a solid performer in the shelf plan.  Rogaine, meanwhile, has also done well in HBC’s hair care sections. And men’s fragrances have found a permanent home within the shaving skin care categories.

Here are some of the goings-on in Men’s Grooming today.   

• Procter & Gamble, HBC largest consumer goods manufacturer, recently acquired "The Art of Shaving," a retail chain of more than 50 high-end men’s stores.  Literally dozens of new items in men’s care can be found in these stores mostly bearing the Gillette brand name.  P&G has also resurrected Old Spice with new packaging and associated items to compliment its basic aftershave lotion business.

• Energizer Holdings, best known for its Energizer batteries also produces Schick razors/blades, and has acquired Edge Shaving Cream from S.C. Johnson Co. This should provide a good companion for Schick. 

• Bic, a strong player in women’s shaving, has come out with new technology for its men’s disposable razors.  

• And Unilever, a leading player in the Men’s Care category, has built a formidable business with Axe products deodorant body sprays, shower gels, lotions.  They have just announced a major move with l0 new Items for the Men’s Hair Care line, with colorful packaging designed for young men and a new line of skin care, Clinical Therapy, plus Vaseline for Men.

• Beiersdorf has been pursuing the men’s skin care business for several years, with two dozen men’s items under the Nivea label, including skin shaving (a gel and a “Post Shave Balm”) and hair care.

So the men’s grooming business is growing.  But supermarkets haven’t done all that well with male shoppers in the past, especially young males. Traditionally, supermarket’s core base has been women.  Fortunately, male shopping is growing in grocery stores, and more grocery operators are realizing that having full and well-merchandised shelves for men’s products can help bring them in. Male shoppers are a desirable customer: Once inside the store, male shoppers buy high-impulse and high-profit items.

Supermarkets have a good chance to build their HBC business with Men’s Grooming.  But only IF we work at it.  Supermarkets should give men shoppers more attention by promoting and presenting men’s products in high-visible, well-organized sections, clearly signed and better merchandised. It’s a growing business that’s worth going after.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Cleaning Up with Cleaning Aids

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

There was a time when cleaning the floor was considered drudgery, but not today. As high-powered TV commercials show, when scrubbing easily with new-type mops, those dismal days appear to be gone.
 
Mops and brooms have emerged from that plain old cleaning section to a transformed, much stronger non-food department with big product improvements.  While the Cleaning Aids category still includes brooms, mops and brushes occupying 8 to 12 running feet of gondola space in most supermarkets, it maintains its position as a grocery-store mainstay.
 
“Stick goods”–brooms and mops–have been reduced in the number of SKU’s stocked, but the offering has been upgraded with retails often approaching $20.  Other cleaning items—from small kitchen scrapers to formidable brushes feature ergonomic handles and helpful how to-use instructions with attractive modern packaging.  Technological improvements include new high-tech materials that cut through grease and clean up easily.
 
Like other products, each store needs to carry brands suitable to local wants and demographics.  Imperial stocks two major brands (with over 150 SKUs per brand) and selected SKUs in two other brands for high- income and budget-minded shoppers. Pricing is especially pertinent today, and of course, an increased number of promotions are more important than ever in overcoming those shoppers who keep products longer, not replacing them as often.
 
Despite the softer economy, cleaning aids in supermarkets are doing well, overcoming heavy competition from mass merchandisers, hardware stores, home improvement outlets and dollar stores. However, for maximum success, supermarkets must recognize that, while impulse sales are helpful, lower prices will make a difference.  Shoppers will know when important pricing reductions have been made and when featured items are promoted.

Cleaning aids have two major promotional periods every year: Spring and Fall Cleaning.  This is an opportunity for supermarkets to add massive floor displays and combine lower-margin movers like dish detergents with high-impulse, high-margin cleaning aids in their ads.
 
The result of P&G’s efforts to cross-merchandise Swiffer Sweeper mops and pads by cutting in 4-feet to 8-feet inside the Grocery’s detergent departments, along with other manufacturers such as Clorox with Ready-Mop and Grab-it Mop by Pledge, creates another opportunity.  We recommend merging Swiffer and other lines of sweeper mops and pads into the Cleaning Aids category to create a more complete department with better product adjacencies.

So in conclusion, success in building the Cleaning Aids department depends not only on the item selection, pricing and themes, but on the attention given to this basic well-established category.  Give it the attention that’s due, and supermarkets will clean up with cleaning aids.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Congratulations!  Big Y -  2009 New England Retailer of the Year

Michael D. Sleeper, President/CEO, Imperial Distributors, Inc.

One of the best things about writing a column is having the opportunity to reflect on those defining moments that changed our industry.

In the early 90’s, the defining moment for Big Y and for our industry came with the introduction of Big Y’s World Class stores.  It was a dramatic change that transformed Big Y from a small local chain to a leading supermarket chain with a national reputation for quality and innovation. 

The D’Amours had the motivation and vision to build a World Class business.  Their leadership produced World Class product assortments, merchandised in markets with World Class store décor and executed by World Class well trained, customer-friendly people.

From my personal viewpoint, Big Y has contributed so much more!  The D’Amours have never forgotten their roots as a family enterprise.  Their generosity is remarkably inclusive, from an unwavering commitment to our industry, to their philanthropy and community involvement, and certainly to their unparalleled dedication to education.  Big Y is a role model for all of us who are engaged and invested in the supermarket industry and especially for those of us who operates a family business. They exemplify the highest standards of what can be achieved.

It is for these reasons that the D’Amour family and all of the Big Y associates are incredibly deserving to be honored as the 2009 New England Retailer of the Year. 

Congratulations to a World Class family and a World Class team, who together, built a World Class company.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com