Commentary From Our Chairman / CEO
Why “Speed to Shelf” is Essential for HBC
By Mike Sleeper, Chief Executive Officer, Imperial Distributors, Inc.
With fierce and growing HBC competition from other channels (Wal-Mart and Target in mass merchants, CVS and Walgreens in chain drugs), supermarkets are facing an unprecedented challenge to hold their market share. Supermarkets’ share of HBC sales in the northeast declined by 1% in 2005 vs. chain drug, which increased by 2.7%.
HBC is still a solid department in supermarkets. Infusion of new items, larger departments, better assortments, stronger promotions and in-store pharmacies have helped the cause. And an aging population has enhanced the outlook and expanded the overall market.
But how supermarkets can regain market share is another matter. A turnaround will require greater commitment from top management to reprioritize their HBC focus on competitive retails, expanded private label, more ad space and keeping ahead with new items.
Adjusting for new and fast-growing products is basic and critical in capturing HBC sales and customer excitement. Two new product launches within the past few months tested supermarket skill in being first to market. Alberto Culver’s new hair care line, Nexxus, and Gillette’s new shaving line, Fusion, are great examples of new products that can make a difference. Chain drug operators blanketed roadside billboards and headlined weekly circulars with claims that they would be first to market. One chain drug got ahead of the game by promising shoppers the week prior to the official product launch that Fusion would be ready for sale in their stores.
So what does this mean for supermarkets? Food retailers must execute with at least the same speed and emphasis as other channels. Otherwise, supermarkets will miss the benefit of heavy media advertising by manufacturers and lose to retail competitors driving hard to capture new-item demand.
New products are the most dynamic force for increasing sales, and “Speed to Shelf’” is the process by which new products are rushed to stores ahead of the competition. Studies have shown that new items generate 30% more sales when they are first on the shelf as compared to stores that lag behind.
For comments or questions, E-mail: msleeper@imperialdistributors.com