A MATTER OF PROTECTION

KIMBERLY PETERSON

In the perennial price wars between food retailers and mass merchants, selling tampons has become one of the most competitive and frustrating battlegrounds in the health and beauty care field.

Supermarket HBC buyers, however, are prepared to fight and not lose what they view as their core customers, women between the ages of 24 and

54. With the expertise of military strategists, retailers have mapped out formulas and techniques for winning the tampon war, even though they are struggling to make a profit.

For the 52 weeks ended March 12, 1994, food stores reported tampon category sales of $334.8 million, which represents 49.8% of the category, up just 1% from a year ago, according to Nielsen North America, Northbrook, Ill. The company reported that sales of tampons in drug stores for the same period were down 3.1% to $173.3 million, or 25.8% of the category. The biggest change occurred at mass merchant outlets, where tampon sales soared 18.8% to $164.4 million, or 24.4% of the category.

Towne-Oller & Associates, New York, a division of Information Resources Inc., Chicago, reports that while tampons are currently the 10th biggest selling category in supermarket HBC departments, their sales growth could be called mild at best. Nearly every retailer polled by SN has found stagnant tampon sales as well, and is making little or no profit in the category. But the demographics of tampon buyers demand that the category gets the attention of supermarket executives.

Apparently the importance of the category has not been lost on mass merchandisers either, who have targeted select brands and sizes and made major waves with their recent sales gains in tampons.

The average tampon buyers are women ages 24 to 54 -- some of the most valued shoppers for supermarkets, mass merchants and drugstores, said Shari Steinbach, consumer affairs and public relations specialist at Spartan Stores, a 500-store cooperative based in Grand Rapids, Mich. Tampons are a product many women buy regularly, and many retailers are using the category to target those female shoppers and the extra sales they bring. "She's a very highly sought-after shopper," said an anonymous buyer at a Midwestern chain with annual sales of more than $1 billion. "If we don't respond to mass merchandisers competitively with tampons, we'll lose her and she'll go to Wal-Mart to buy her Tampax there. "If she buys her Tampax there, is she going to buy her deodorant and makeup there? Probably. So we've lost her in lots of HBA categories, and we don't want to do that. We want to try to keep her, and that's the problem," said the source.

Many supermarkets have turned to promotional activities and lowball pricing in their efforts to appeal to the tampon buyer. Spartan Stores has effectively used corporate-wide advertising programs, coupons and displays to increase tampon sales, Steinbach said.

"Tampons represent 37.6% of our feminine hygiene sales, and our sales have been holding about flat," Steinbach said. "We're trying to get displays with retailers and we have a feminine hygiene product out there through our special advertising at least once a month."

Coupons move tampons the fastest at Copps Corp., Stevens Point, Wis., according to the 54-store chain's HBC buyer, Mark Beyer. The chain has also found success selling product sizes that are different from what mass merchants emphasize.

"We [target different sizes of tampons] automatically because mass merchants tend to go with larger sizes," Beyer said. "We also use coupons for one dollar off." Yet the perception that mass merchants sell every product at a lower price is not true, said Rick Van Klaveren, director of advertising at Harding's Friendly Markets, a 34-store chain based in Plainwell, Mich. Supermarkets are sometimes able to offer better deals, even on tampons.

"Sometimes [at mass merchandisers] in some of those [tampon] items, there aren't the savings that people assume there are," Van Klaveren said. "We try to break [prices] down into a unit-by-unit or a pack-by-pack size to show this to the customer. "Obviously we pick the item that we can match up well on, and then we let our customers know on a sign on the shelf that the cost per unit on this item is equal to or better than your cost per unit on the large packs at a mass merchandiser," he said.

The package size of a tampon product is integral to profitability, and supermarkets need to be aware of what mass merchants are targeting, the Midwestern buyer said. "If you're talking about the 32-count Tampax or the 22-count Playtex tampons, they're not profitable at all," the buyer said. But, continued the source, by finding other package sizes to advertise and promote, supermarket retailers can boost sales volume and profitability simultaneously.

Valu Food, Baltimore, a 17-store chain, also is introducing a private label, said Allen Karpe, director of HBC and pharmacy. "We're bringing in a private label to offset some of the gross loss in the [tampon] department," Karpe said. "We will profit more with that than on the trade names, like about 20%. You're lucky if you make 5% on the other [brand names]."

Shippers and floor stands move tampons the fastest at Valu Food, Karpe said.

"Tambrands is our No. 1 product, and we do some real lowball pricing on them to move them," he said. "It's a fast-turning category because everybody needs them."

Despite all the efforts made by supermarkets, tampon sales may just remain flat until an exciting introduction changes the category, the Midwestern buyer said.

"The sales are trending flat because the dollar ring is going down," she said. "And there haven't been any new, fabulous introductions, nothing revolutionizing the category lately."