Retailers are on diaper duty, at least when it comes to managing the diaper aisle.
Category managers and buyers polled by SN said they have found it necessary to reset the diaper section numerous times over the last few years. Most attribute it to diaper-count downsizing and pricing changes from national-brand manufacturers.
"It's a challenging section due to the fact that they keep changing the packs and sizes," said Joyce Owen, category manager, Associated Wholesale Grocers, Kansas City, Kan. "Every time the packs change, the whole diaper section has to change."
Some retailers said they have no choice but to revamp their private-label lines in response to downsizing from national brands. That's the case at Meijer, a 156-store operator in Grand Rapids, Mich., which is in the process of repackaging its Dry Babies and Baby Beginnings private-label brands, according to Erin Vonpongracz, buyer. The new packs will contain fewer diapers and lower price points.
Meijer made the move in response to a reduction in the number of diapers contained in national-brand packages. In October 2002, Kimberly-Clark Corp., Dallas, maker of Huggies, reduced its diaper counts by about 18% across its entire line. Pricing stayed the same on a per-diaper basis, according to a company spokesman.
In February 2003, Procter & Gamble, Cincinnati, followed suit by reducing the number of diapers in its Pampers and Luvs packages. P&G said it made the move to remain competitive with Kimberly-Clark.
Meijer wasn't adversely affected by Kimberly-Clark and P&G's pack changes, according to Vonpongracz. In fact, she said Meijer had no problem accommodating the new packs.
"The transition went smoother than expected," she said.
The biggest challenge, however, was keeping the pricing of its private label in line with the new national-brand pricing. Meijer was concerned that consumers would not realize that Meijer's private label remained a good value.
"We felt it was confusing for our customers because the perception could be that our private label was more expensive, even though it wasn't," she said.
Diapers generated $2.6 billion in sales in food, drug and mass channels (excluding Wal-Mart) for the 52 weeks ended April 20, a 7.5% decline from the same period last year, according to Information Resources Inc., Chicago.
In supermarkets, the top 20 brands garnered $1.6 billion, an 8.6% drop. The No. 1 brand, Huggies UltraTrim, slipped 9.9%, according to IRI. And the No. 2, 3 and 4 brands (Pampers Baby Dry, private label and Huggies Pull-Ups) experienced double-digit sales slides. While the most recent packaging changes occurred in late 2002 and early this year, retailers said the category has undergone a transition in one way or another in other years as well. In the six years that Maryann Cherry has been category buyer at Mars Super Markets, Baltimore, a 16-store retailer, she said manufacturers have launched a new or replacement product practically every six months.
"Manufacturers will take a few diapers out of the pack or change the pricing," she said.
The diaper section can be so unruly that Cherry often jokes to fellow buyers that "if anyone wants to take diapers, you can have them."
Frequent category modifications make the section a laborious one to manage, according to Cherry, who added that they require adjustments to inventory and shelf tags.
Jerry Ward, senior vice president, Mad Butcher, a six-store retailer in Pine Bluff, Ark., also laments over new diaper packages. Each time a new package is introduced, Mad Butcher's supplier, Supervalu, Minneapolis, must be brought in to reset its diaper sections, which average about 16 feet, according to Ward.
"It's a lot of extra work," he said. "You have to order new product and pull out the discontinued items."
Ward said packaging changes seem to occur every few months. Along with being time-consuming, they have hampered the retailer's efforts to track diaper sales. Since Universal Product Codes (UPCs) must change when a new product is introduced, it's tough to see what is selling.
"There's so much changing of the packs that it's impossible to tell what you're moving," he said.
While new items are common in other categories, they're usually product extensions, not replacements, said Ward.
"You don't have to go in and pull product off the shelf," Ward noted.
On average, most diaper packages are down three to four diapers this year compared to last year, said Owen of Associated Grocers. That means that consumers may have to buy a mega pack to get through a week, when they used to need only a jumbo, she said.
Vonpongracz of Meijer agreed.
"Because there aren't as many diapers in the jumbo packs as there used to be, the mega packs will become more important," she said.
Owen said diaper counts have traditionally changed over the years, but not as frequently as they have over the last year or so.
"It requires us to develop a new planogram," she said. "We have to get the old items out and the new items in."
When asked how consumers are responding to the changes, Owen said few complain. She attributes this to category buying patterns, noting that most consumers only purchase diapers for just a few years.
"They may not know what was there a year and a half ago," she said. "It's not like buying a can of coffee."