HANDSOME RETURNS

PAT NATSCHKE LENIUS

Supermarkets generally are doing a good job handling the vast variety in the moisturizer lotion category.

It has become an over-crowded field with added ingredients -- alpha hydroxides, vitamins, proteins, sun protection -- and enhanced formulations for specific skin types.

Retailers are making room on their already tight shelves for yet another new entry, an anti-bacterial lotion from Bristol-Myers Squibb's brand Keri, which is expected to create a segment within the category as anti-bacterials did in soap.

"It's unique to the category," said Jane Jansch, nonfood category manager, Copps Corp., Stevens Point, Wis., about the anti-bacterial lotion.

"There will be a market for this type of item, especially in our part of the country where it's cold much of the time. We have already ordered the item, and it should be in the stores shortly," she said.

Valu Food, Baltimore, will make room for two stockkeeping units of the anti-bacterial lotion, a 6.5-ounce and 11-ounce. "We believe this is the first anti-bacterial hand lotion that will represent a new segment in the category," said Allen Karpe, Valu Food director of pharmacy, health and beauty care.

Nevertheless, many retailers are concerned with product proliferation in the category.

"There are too many variations in sizes, flavors and brands. It's confusing to consumers. There are roughly 300 to 400 SKUs that do 80% of the business," said Jeff Maxwell, category manager, beauty care products, SuperValu, Minneapolis.

The popularity of bath and body shops, as well as demand for related products, has spurred category growth and forced supermarkets to refocus their positioning of the category.

"We see the hand- and body-lotion category shifting into more of a bath boutique item. The trend has been around for a couple of years. This is becoming kind of a segmented category," said Jansch of Copps.

At Ray's Food Place, Brookings, Ore., at three test stores, bar soaps are being merchandising in the HBC aisle. A bath and body section has also been set between lotions and creams and bar soaps, reported Dan Van Zant, director of general merchandise.

"This concept ties it all together," said Van Zant. "We know that customers typically have bar soap on their shopping lists and we want them to shop the HBC aisle. At these stores, we have everything that goes in the bathroom in one aisle, including deodorants, bath products, cosmetics, skin care and hand and body lotions."

Sales are up, say retailers. According to Information Resources Inc., Chicago, both food and mass merchandisers posted gains in the $807 million category, up 3.9% and 13.4%, respectively, for the 52-week period ending July 14.

"The category is up vs. last year. I would say the increase is double digit. It's partly our growth. We have picked up some new stores. Also, this category, along with bath and body products, seems to be increasing," said David Himel, HBC buyer, Associated Grocers, Baton Rouge, La.

Meanwhile, sales at drug stores fell 4.4% during the same period.

"Bath and body shops must be effectively gaining share from drug stores and other classes of trade as well," said Jan Winn, director of general merchandise and HBC, Big Y Foods, Springfield, Mass.

"Drug stores seem to be losing share in a number of health and beauty care categories. It may be just because of less traffic in those stores vs. supermarkets and mass merchandisers," said Randall King, nonfood buyer, Byrd Food Stores, Burlington, N.C.

Although mass merchandisers have demonstrated the largest sales gains in the category, most grocery chains are confident they can compete with the discounters in the moisturizer category even though the discount channel may use commodity items as a loss leader. Supermarkets' strategy against mass merchants is to maintain a broad variety at a competitive price point, said retailers.

"We compete with mass merchandisers by offering variety, competitive pricing and promotion," said Winn of Big Y.

"To compete with mass merchandisers, who are very aggressive in this category, we have to try to get a good deal with the manufacturer. That usually means buying more of the product, stacking it high and trying to sell it at a good price," explained King of Byrd Food.

Van Zant at Ray's Food Place concentrates on price promotions in competing with mass merchandisers.

"We run as many temporary price reductions as we possibly can. We take advantage of as many bonus packs as possible. We negotiate with vendors about participating in our promotional program, which would afford us the opportunity to get some bill-back dollars to place against cost of goods and reflect at retail," said Van Zant.

"If we're at a reasonable price, we'll still capture sales. Consumers will not leave supermarkets to go to mass [marketers] if there isn't a large price spread," said Maxwell.