Jacksonville, Fla. & Arlington, Va. (August 20, 2018) — With the grocery channel challenged for growth, the Health & Beauty Care (HBC) and General Merchandise (GM) departments offer high development opportunities, attractive shopper demographics and high-ticket value visits. Combined, over $80 billion are spent each year across these departments in brick-and-mortar stores, yet shoppers are spending the majority of their money on HBC and GM in other channels.
The 2nd annual The Power of GM and HBC in Grocery report released today by Acosta, a leading full-service sales and marketing agency in the consumer packaged goods (CPG) industry, and Food Marketing Institute (FMI), the voice of the food retail industry, provides insights into the state of the industry, developing trends and tactics to help grocers grow their businesses.
FMI Director of Industry Relations and Development, Peter Collins, commented, “In an industry that’s rapidly changing, we want to consider how GM/HBC categories will transform to create new experiences for customers and a profit center for food retailers. Fundamentally, Acosta is helping us take the mystery out of what’s hindering the success of GM/HBC products in traditional grocery.”
“It may come as no surprise that eCommerce continues to be a major challenge for traditional retailers, but the other key trend we are seeing is not as predictable — Millennials represent a larger opportunity for in-store purchases, with higher reported buying rates in grocery stores than any other generation,” said John Clevenger, Managing Director and Senior Vice President, Strategic Advisors at Acosta. “To be successful in increasing GM/HBC revenue, retailers need to create disruption in-store — more than 50 percent of shoppers shop the perimeter of the store weekly, compared to about 20 percent who shop HBC and GM each week.”
Acosta and FMI’s The Power of GM and HBC in Grocery report revealed consistencies among top retailers in category growth, strategies employed to increase revenue and tips for growth in these categories:
· Top categories for increased HBC sales were: cold/allergy/sinus tablets (11 percent), vitamins (9.8 percent) and toothpaste (5.8 percent).
· Top categories for increased GM sales were: culinary (32.3 percent), office products (14.2 percent) and foil pans (12.5 percent).
· To successfully drive GM/HBC growth, winning grocery retailers:
o Promote more often, but not necessarily at deeper discounts – utilize promotions to drive awareness.
o Remain competitive with pricing, matching other channels and beating other grocers.
· With HBC grouped together in one location, focus on driving traffic to the department by promoting frequently for awareness, instituting prominent “consumer solution” end-cap displays and offering front-page feature support.
· With GM products dispersed throughout the store, focus on bringing the department to the traffic by cross merchandising with complementary products, creating secondary locations and capitalizing on seasonal themes.
The 2nd edition of The Power of GM and HBC in Grocery was completed using analysis and custom research conducted by Acosta’s Strategic Advisors, in partnership with FMI.
To access the full report, click here.
View Acosta's full HBC Snapshot here.