Tracking OTC/HBC Sales: Drugstores vs. Food Stores

By Gannon, Kathi | Drug Topics, May 17, 1993 | Go to article overview

Tracking OTC/HBC Sales: Drugstores vs. Food Stores


Gannon, Kathi, Drug Topics


In a two-way race between drugstores and food stores, drugstores are enjoying a nice, but not wide, lead in sales of over-the-counter medications and health and beauty care products. Last year, they outpaced supermarkets in the race for total OTC/HBC sales, according to an analysis of 94 product categories by Towne-Oller & Associates.

For both types of outlets combined, sales of OTC drugs and health and beauty care items climbed from $26.1 billion in 1991 to $26.8 billion in 1992, an increase of 2.5%, the New York City market research firm told Drug Topics.

The drugstore portion last year was $13.5 billion, an increase of 3.6% over the previous year; food stores took a $13.3 billion slice of the pie, up 1.5%. This was a reversal in positions from 1991, when food stores had the slight edge ($13.1 billion versus $13 billion).

For nonprescription drugs alone, drugstores showed a gain of 1.8% in sales, increasing from $6.1 billion to $6.2 billion. Sales of OTC drugs in food stores increased by only .8%, expanding from $5.2 billion to $5.3 billion between 1991 and 1992.

In the health and beauty care area, drugstores made bigger percentage gains than food stores, although food stores held the edge in actual dollar sales. Sales of HBCs in drugstores grew by 5.1% from 1991 to 1992, climbing to $7.3 billion from $6.9 billion. HBC sales in foodstores, meanwhile, rose by only 1.9%, increasing from $7.9 billion to $8 billion.

But, "sales in food stores didn't decline," emphasized analyst Gary Andrechek of Towne-Oller. "The sales just didn't gain as dramatically as drugstore sales."

Much of this could be attributed to the price competition in food stores, he told Drug Topics. "As unit sales started to pass dollar sales, it drove dollars down."

Another possible cause might be the different merchandise mix in drugstores. "Drugstores are usually more willing to take on newer, higher-priced products," Andrechak said. But, he conceded, it's difficult to pinpoint exactly why drugstores fared better.

OTC gainers: Among the over-the-counter drugs, the biggest gainers in drugstores and food stores combined were wart removers and personal lubricants, which increased by 41% and 30%, respectively.

The wart removers Pediapatch and DuoFilm were introduced OTC, contributing to an increase in this category. The personal lubricants were pushed by the introduction of therapeutic-based brands. Replens and Gyne-Moistrin led the category.

Hydrocortisone products were also on the upswing; these products increased by 25% in dollar volume from 1991 to 1992. "This was due to the availability of 1% hydrocortisone OTC," explained Andrechak.

Also showing a strong gain were antidiarrheals, which increased in dollar volume by 18% over the same time period. The patent expiration of loperamide was a contributing factor here, with the introduction of several private-label products. "The category has consistently performed well since Imodium has been available OTC," Andrechak said. Also contributing to growth in the category in 1992 was the availability of bismuth-based pink liquid remedies to treat diarrhea.

On the upswing, too, were eye medications, which increased by 12%, and male contraceptives, which made a similar percentage gain. …

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