American consumers buying health and beauty care products give supermarkets high marks for selection, ease of shopping and quality of private-label products, but they feel they pay more than they would at discount stores for the same items, according to a national consumer survey commissioned by Supermarket News.
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determining where they go to buy their HBC supplies.
Three out of four shoppers said they feel they pay more for health and beauty care products at supermarkets than at other retail stores.
However, they didn't necessarily agree on precisely how much of a premium they pay. Slightly more than 30% of those surveyed said they pay 2% to 5% more at supermarkets. Supermarket prices were perceived as 5% to 10% higher by 23.6% of the consumers and 17.3% said they were paying a premium of 10% or more.
"Consumers in America simply believe they save at discount stores," said Britt Beemer, chairman of America's Research Group and author of the study.
"The fact that one in six Americans feels [HBC] prices are at least 10%, and in some cases more than 20%, higher should be viewed as a warning sign for those retailers looking to health and beauty care as growth categories," he said.
Price was the dictating factor for more than a third of shoppers buying HBC products in the survey. In the health care category, 33.3% said price was the determining factor in their buying decision, while 36% of those buying beauty care products also based their decision on price.
Even though many consumers said they feel they pay more when shopping at supermarkets, most said they are paying no more than they were a couple of years ago for the same products. Compared to two years ago, 43.9% of shoppers said prices are lower and 45.8% believed prices have remained the same at supermarkets. Only 10.3% said prices have gone higher.
For consumers not currently shopping supermarkets for HBC products, almost half of those surveyed, 45.2%, said they might switch to food stores for reasons related to price specials. One in five said advertised specials would make them shop supermarkets. In-store specials would attract 13%, and store coupons another 12.7%.
"Supermarkets may find themselves in a unique retail position to deal with the price problem," Beemer said.
He recommended that supermarkets pursue aggressive HBC discount programs to better compete against the other classes of trade. "The best marketing strategy to improve sales in the health and beauty categories would be to heavily promote double coupon incentives," he explained.
"Coupons are very popular with shoppers, and supermarkets are already well equipped and accustomed to promoting coupons with customers," he said. "By stressing coupon redemption more, and doubling the value, supermarkets can effectively overcome the price objection many consumers have."
Positioning supermarkets as being competitive in HBC pricing is a concept many consumers applaud, the study found.
· Nearly three in four were aware of everyday low prices they can find on supermarket shelves.
· Four in 10 rated those low prices as being very important in their buying decisions.
· Only one in 10 rated everyday low price as being not very important in buying HBC items.
Factors other than price, however, are considered important by consumers, too, and supermarkets received high marks from consumers in terms of product selection and the convenience of one-stop shopping. Indeed, it was those attributes that consumers said would most likely draw them to the supermarkets for HBC.
Some 26.2% of the respondents said selection would make them turn to supermarkets for HBC. Ease of one-stop shopping drew the next largest response, 23.9%. Pricing drew low percentages, another indication that consumers don't expect to find the lowest prices at supermarkets.
When asked about critical factors influencing buying decisions in the health care products sector, price was the most important factor for 33% of the respondents, while store location, product selection and one-stop shopping were close behind, with 22.9%, 21.4% and 17.6%, respectively.
In buying beauty care products, price also reigned, with 36% of the consumers choosing it as a critical buying factor. But selection, store location and one-stop shopping also weighed heavily, with 22.2%, 18.4% and 17.9% of the people surveyed placing those criteria as most important to their buying decisions, respectively.
The fact that a store might carry a customer's favorite brand was of little importance to most consumers. Less than 5% of the respondents listed branded products as most important to their buying decision. In terms of variety and selection, 52.6% of the consumers said supermarkets have a good to excellent selection of private-label HBC products. When comparing the selection of HBC products supermarkets offer today with the selection available two years ago, 55.5% feel the selection is either "somewhat better" or "significantly better." For 41.5% of the shoppers, the selection has remained the same.
Consumers said they feel confident about their ability to find HBC products on supermarket shelves. Half the shoppers surveyed said finding personal care products is "somewhat easy," and 29.8% called it "very easy."
When they are unable to find what they want, consumers are not shy about seeking assistance from store employees. Nearly two in five said they would ask for help from a cashier, clerk, pharmacist or customer service representative. Only one in five said they would go to another store if they could not immediately find what they wanted in a supermarket.
The majority of consumers, 67.1%, also said they can find ethnic HBC products easily at supermarkets.
The study found that more than one in four consumers typically shop supermarkets for health care products, while more than one in five shop for beauty care in supermarkets.
Supermarkets lag behind drug stores and discount stores in both categories, according to the survey. In health care products, 39% reported they shopped at drug stores, and 28.8% said they shopped at discount stores. Of the 28.2% who said they shopped supermarkets, 17.4% of the overall sample shop supermarkets with pharmacies, while 10.8% shopped stores without pharmacies.
The trend toward installing pharmacies inside supermarkets has clearly caught the attention of half the shoppers, according to this survey. Slightly more than 51% say they prefer shopping supermarkets with pharmacies.
When popular health care products are switched from prescription to over-the-counter medicines, one in five shoppers go to supermarkets to buy them. Drug stores are most frequented in this category, at 45.2%, followed by discount stores at 29%.
When it comes to buying beauty care products, 35.2% of shoppers claimed they first shop discount stores. Drug stores were chosen by 28.8% of the shoppers. Supermarkets with pharmacies were the choice of 12.8% of the consumers, and 9.8% said they go to supermarkets that don't have pharmacies.
The survey probed consumers about how many times they shopped specific types of stores during the course of an average week.
Supermarkets are clearly America's most frequented retail stores. Consumers who did not shop weekly were asked to estimate the number of times they shop during a normal month. The results showed that nearly half, 45%, are most likely to shop at a supermarket once in an average week.
A fifth, 19.3%, of the consumers are most likely to shop at a supermarket twice a week, and 13.3% generally shop at supermarkets twice during a normal month.
When it comes to discount stores like Kmart or Wal-Mart, nearly a third, 31.2%, said they generally shop once in a normal month. Nearly a quarter, 23%, said they shop discount stores once a week, while 20.7% of the consumers said they shop discount stores twice a month.
When asked about drug stores, nearly half, 43.1%, shopped once during a regular month, while 19.1% shopped twice a month and 18.3% said they shopped at a drug store once a week.
Consumers' shopping patterns at department stores are similar to their shopping patterns at drug stores. Most consumers, 45.6%, shopped at department stores once a month, while the next largest group of nearly a fifth of the shopping population shopped twice over the course of a normal month. The third highest response rate, 15.6%, was given by the people who shopped department stores once a week.
Based on this survey, it is evident that consumers in this market are more likely to shop at supermarkets on a weekly basis, while they usually shop discount, drug and department stores on a monthly schedule.
"Obviously, the first step in selling is to get customers in the door, and supermarkets have a huge advantage in that area," Beemer said. "But just because they're in the store doesn't mean they're going to necessarily buy every market category. The convenience of one-stop shopping will succeed only when combined with the right price."
Who Was Surveyed
For SN's HBC consumer survey, America's Research Group, Charleston, S.C., interviewed a broad mix of more than 1,000 people from around the country by telephone.
The highest percentage of respondents were age 65 and over, accounting for just over a quarter, or 25.1%. People ages 35 to 44 made up 23% of those surveyed and 16.7% of those polled were ages 25 to 34. Those in the 45 to 54 age bracket accounted for 15% of those surveyed, followed by the 55 to 64 age group, 12.7%, and those under 25, 7.5%.
Female respondents outnumbered males 56.2% to 43.8%.
Tabulated by educational level, high school graduates accounted for the highest number of respondents, 41.8%. Respondents with "some college" education accounted for 25.8%, followed closely by college graduates, who made up 23.8% of those surveyed. Those with "less than high school" education, 4.5%, and graduate school graduates, 3.8%, made up the remainder of the respondents.
Retired workers accounted for 32.9% of those surveyed, followed closely by white-collar workers at 31.1%, blue-collar workers at 27.1% and the self-employed at 5%. Those with other professional or working status made up 3.9%.
Ranked by family status, married people with children accounted for more than one in three, or 34.9% of respondents. Single people accounted for nearly a quarter of those polled, or 24.5%, followed by married people with children living away from home at 22.6%, married people without children at 11.4% and single people with children at 6.6%.
The New England/Mid-Atlantic region was home to more than one in five, or 21.2%, of the respondents. That group was followed by people from the South Atlantic region at 17.8%; South Central, 17.2%; Pacific region, 16.1%; North Central/ Mountain, 14.0%, and East North Central, 13.7%.
Price Is the Draw ...
No surprise, the highest number of consumers named price as their No. 1 consideration when shopping for health and beauty care products. Selection and variety were the top factors for almost one in five. Nearly 23%, however, said store location was their main concern for health products.
WHICH IS MOST IMPORTANT TO YOU WHEN DECIDING WHERE TO SHOP FOR HBC PRODUCTS?
Price Health 33.3%
Beauty 36.0%
Selection/variety Health 21.4%
Beauty 22.2%
Store location Health 22.9%
Beauty 18.4%
One-stop-shopping convenience Health 17.6%
Beauty 17.9%
Carrying favorite brand Health 3.4%
Beauty 4.9%
Pricey's a Drawback
A majority of consumers still consider supermarkets more expensive than other stores for HBC. That's bad news, considering that price ranks as their No. 1 buying decision for HBC.
DO YOU CONSIDER SUPERMARKETS MORE EXPENSIVE THAN OTHER STORES WHEN SHOPPING FOR HEALTH AND BEAUTY CARE?
YES 63.8%
NO 32.7%
DON'T KNOW 3.5%
A Three-Way Fray
Supermarkets placed third on the lists of where consumers normally buy HBC products. Supermarkets with pharmacies, however, were more frequently sought out as a destination for health products than their nonpharmacy counterparts, grabbing 17.4% of consumers compared to 10.8% for food stores without pharmacies.
WHERE DO YOU NORMALLY BUY HEALTH/BEAUTY CARE PRODUCTS?
Drug store Health 39.0%
Beauty 28.8%
Discount store Health 28.8%
Beauty 35.2%
Supermarket Health 28.2%
Beauty 22.6%
Department store Health 1.0%
Beauty 7.2%
Club/warehouse store Health 1.1%
Beauty 1.3%
Savings Galore
About 75% of consumers said they feel they save money when shopping for HBC at discount stores as opposed to supermarkets, with most of that group saying they feel they save between 4% and 10%. However, 25.4% of the total group feels discount store prices are either about the same, 20.9%, or higher, 4.5%.
HOW MUCH DO YOU FEEL YOU SAVE SHOPPING FOR HBC AT DISCOUNT STORES COMPARED WITH SUPERMARKETS?
Nothing; discount store prices are higher 4.5%
Prices are about the same 20.9%
Save 2% - 3% 13.3%
Save 4% - 5% 18.8%
Save 5% - 10% 23.6%
Save 10% - 20% 13.4%
Save more than 20% 3.9%
Private Strength
Supermarkets scored high marks for their private-label selection and quality. More than half of the respondents cited food store selection and quality of private-label HBC as good or excellent. Opposingly, only 2.9% of respondents said private-label HBC quality at food stores was poor.
HOW WOULD YOU RATE SUPERMARKETS IN TERMS OF THEIR SELECTION OF PRIVATE-LABEL HEALTH AND BEAUTY CARE?
Excellent 5.7%
Good 46.9%
Only Fair 27.6%
Poor 4.5%
Don't buy private label 15.3%
WHEN YOU HAVE PURCHASED PRIVATE-LABEL HBC AT A SUPERMARKET, THE QUALITY HAS BEEN:
Excellent 6.0%
Good 51.8%
Only Fair 19.9%
Poor 2.9%
Don't buy private label 19.4%
Everyday People
Consumers haven't ignored the message of everyday low prices that is being drilled home by Wal-Mart and other retailers. Almost three out of four people were aware of EDLP at local supermarkets. Nearly 90% of consumers surveyed said everyday-low-price policies were at least somewhat important in deciding where to buy HBC items.
