Retailers working to lather up liquid hand soap sales are weighing the relative merits of pumps vs. refills.
Some chains said the refills generate better profits, while others opt for the pumps.
A buyer with a large Midwestern wholesaler said refills account for the bulk of sales for his retail clients. He added that it's more profitable for his company to sell the larger sizes, such as a 24-ounce refill, instead of a 7-ounce pump.
"We've had better success in our market with the refills," said the buyer, who did not want to be identified.
The movement of pumps vs. refills typically depends on how long a product has been on the market. Pumps initially drive business in supermarkets, particularly during introductions that are packaged with a refill size, said Peter Coe, category manager at Kash n' Karry Stores, Tampa, Fla. At Kash n' Karry stores, consumers tend to purchase the introductory pump/refill package. If a refill is available, pump sales will decline about six months after the product launch, he said.
Likewise, if a refill is available at the same time a pump debuts, refill sales will remain flat, while pump sales climb, Coe added. "At first, sales are slow and soft, as everyone makes a pump purchase," he stated.
However, after the pumps have been on the market awhile, the refills sell better, several retailers told SN.
"When [the category is established] I'm sure the refills will be the more popular sale because they're cheaper and the shopper already has the pump at home," explained Mark Polsky, senior vice president at Rockville, Md.-based Magruders.
David Assayag, vice president, Westward Ho, Los Angeles, said pumps are the primary movers in his stores.
"The refill is less convenient, so people tend to buy the pumps," he said.
Meanwhile, some chains are just beginning to carry liquid soaps. For instance, the segment has been available at Ray's Food Place, Brookings, Ore., for only the last six to eight months, said Ed Kessler, vice president.
"The Northwest is an undeveloped market when it comes to liquid soaps," he said. "It's a very slow category for us. We only represent about 30% of the items available because it maintains only about 18% of our total retail sales [in the category]," Kessler added.
Ray's has seen the most growth in liquid hand soap pumps. He expects the refill sales to pick up as the category matures in the grocer's market area.
A buyer with an established West Coast wholesaler estimated the sales volume ratio of pumps to refills as 60-40.
Whether a pump or refill is preferred, liquid hand soap generates strong profits, retailers and wholesalers told SN. "The margins are good. We're pretty happy with [the segment] right now," added Magruders' Polsky.
Other retailers said they benefited from margins ranging from 20% and 45%. Big Y Foods, Springfield, Mass, has about 25% to 35% margins, said category manager Al Young. Foodland Super Market, Honolulu, tops SN's retailer poll, with 35% to 45% margins, according to spokeswoman Shirley Kuma.
Retailers agreed that they typically promote items once a quarter in conjunction with manufacturers. Kessler of Ray's Food Place said manufacturers will tie liquid hand soap in with related products.
"For instance, Dial ends up tying in their particular products with family group ads. It makes it very easy to then promote [liquid hand soap]," he explained.
He added that temporary price reductions were more important to driving sales than ads.
Becca Anderson, spokeswoman at Bashas' Markets, Chandler, Ariz., said the company includes one variety of bar soap and a different brand of liquid hand soap in its monthly Bargain Boosters promotion, a stamp-saver program.
In addition to their own ads, Bashas' relies on manufacturer television ads to drive sales, added Dale Schloss, grocery buyer at the chain.
Liquid soap manufacturers are helping grocers better compete by offering equal package sizes and promotional programs. The buyer from the Midwestern wholesaler said his retail clients promote liquid hand soap every quarter.
"Most [promote] at least twice a year, and many of them [will] four times," he added.
Polsky of Magruders added that retailers might benefit from additional advertising during the summer months.
As for competition from alternate outlets, most retailers surveyed don't feel too threatened. In the past, mass merchants and club stores controlled the larger-sized refill market, while supermarkets dominated the first-purchase pumps market.
But vendors are helping to level the competitive field by offering grocers larger refill sizes in addition to the standard pumps.
"Our business is doing well as long as vendors promote regularly," said Al Young, category manager at Big Y Foods.
While mass merchants may have captured some bar soap sales, they have had little impact on liquid sales.
Vern Buford, director of grocery merchandising for Rice Food Markets, Houston, said his chain hasn't seen mass merchants as being any more of a threat in liquid hand soap than any other category.
Others polled agreed, saying liquid hand soap sales at supermarkets have experienced little erosion from alternative formats because the two categories, bar soap and liquid hand soap, see marginal overlap in grocery outlets.
Most said the latest wave of product introduction has helped bring more consumers down the soap aisle -- without cannibalizing bar soap sales.
Kessler of Ray's Food Place said it's too early to tell how liquid hand soap sales will balance out because the products are still so fresh to his market area.
