PICKING UP STEAM

MICHAEL SLEZAK

With their increasingly steaming sales, hot cough and cold remedies are quickly becoming supermarkets' cup of tea in spite of mass merchants' competitive squeeze on the items.

Food retailers polled by SN said they are fighting back with promotions, ads and the right selection to keep sales of the hot liquids bubbling at their stores.

Demand for the products also is helping to fuel the rapid growth of the cough and cold category, said retailers. Category sales at food stores jumped 14% to $888.6 million for the 12 months ended Jan. 31, 1994, according to Towne-Oller & Associates, the New York-based market research subsidiary of

Information Resources Inc., Chicago.

Most retailers said they are having success with hot cough and cold products -- particularly when the products are accompanied by a promotional effort. While not all are sure if the category will continue to grow at its current rate, most said the hot remedies have definitely found a warm, cozy spot in their health and beauty care de- partments.

"Hot cough and cold -- they've done well. They've had a good year, and really have been catching on in this market area. We're a little behind urban areas in catching on to trends," said Burnie Campbell, advertising director for Big Valu Discount Foods, a 16-store chain based in Lexington, Ky.

An HBC buyer from a midsized Massachusetts chain also said hot cough and cold products "do very well" at his store.

"When we promoted them with ads and endcap displays, they did very well," he added. "We get a lot of manufacturer support, especially when they break a new item," such as a hot cough and cold remedy.

"They move really well. It's a possibility they'll move even better this year. People buy a lot of these things at grocery [stores] to save themselves a trip," said Diane Meyer, HBC buyer at Northwest Supermarkets, a four-store independent in Sauk Centre, Minn. "Usually there are some ads in our fliers, and we promote the products that way. The ads seem to work very well."

"They haven't done too badly," agreed Dave Lynam, HBC director for Harding's Friendly Markets, a 35-store chain based in Plainwell, Mich. He said people seem to be accepting the hot remedies more the longer they are on shelves.

"We've advertised [these products] a couple of times. We've got a regular HBC ad we run every week and it's pretty steady business. It worked well when we featured [hot cough and cold]," he added.

Vicki Gordon, general merchandise manager for the nine stores of Byerly's in Edina, Minn., agreed sales were up in cough and cold last year.

"I stock the new hot remedies and they do well. With the advertising and all the coupons, people have been trying them more than they did in the past," she ex- plained. "There are a lot of cou- pons and rebates available for people, and people do use them."

However, a few retailers were not quite as enthusiastic about the category.

"Hot remedies may have slowed down a little bit this year. It could've been just a new, trendy item. Compared to the growth in the other areas, hot cough and cold was not as strong," said Laurie Platter, HBC buyer for Fareway Stores, Boone, Iowa.

She added, however, that despite the recent lag in hot remedies at her store, "there'll always be a use for a hot cough and cold product. I think it'll hold pretty even in 1994."

Only one retailer polled by SN had dropped hot cough and cold remedies from his shelves. Larry Miller, HBC buyer for the John C. Groub Co., a 29-store chain based in Seymour, Ind., dropped the products after they sold slowly.

"I haven't seen a lot of the manufacturers doing any support. When I dropped the hot remedies, none of them seemed to care," he added.

Despite a few negative comments about hot remedies, most retailers said they had no plans to drop hot cough and cold.

For food retailers in particular, the recent fire under the kettle of hot cough and cold products has been a particular delight because the category has traditionally been a heavy target of mass merchants and large drug chains.

"A lot of mass merchandisers and large drug stores use cough and cold as a foothold, just like we'd use Miracle Whip or something like that. They sell it at cost and close to cost, so it drives the margins down somewhat," said Campbell. "There's still a market there for food stores, though, most likely as a convenience. As long as your prices aren't out of the ballpark, you'll sell them."

Platter agreed that "supermarkets do OK. In our whole cough and cold area, we keep our costs to the consumers down and narrow the margins where some of the bigger stores could have a tighter margin," she said. "We have some promotions, usually on a temporary pricing program, and they work well."

"We're very competitive with mass merchandisers," said Gordon of Byerly's. "Price and selection both are the best ways to compete."

The HBC buyer from Massachusetts agreed that "supermarkets can hold their own. When we do features on [hot cough and cold], we give a good price point. It keeps us competitive."

Other retailers said mass merchants were still a chilling factor in the category.

"It's hard to compete with other classes of trade as far as price range. We try to keep our prices competitive. We compare prices, go talk with the distributors and go from there," said Meyer of Northwest.

"Our biggest problem is trying to work against the mass marketers," agreed Miller of John C. Groub. "They get a lot better deals than us. We pretty well match them on margins and price, but they're poor margins." Retailers voiced mixed reaction as to whether sales will continue to grow in spite of competition from the mass merchants.

"I don't know if they'll continue to grow. It's hard to say. That category is so competitive. Everyone has their own favorite kind of cold remedy," said Gordon.

"I would think the market for hot cough and cold remedies could grow," said the buyer from Massachusetts, adding that the weather is often a factor in sales.

Campbell said this year's brutal winter played a role in the category's recent successes.

"But," he added, "I just came back from our supplier's show, and some of the advertising I saw that will be available in the next nine to 12 months shows the manufacturers are going to get behind these products. And if they get behind it, it's going to sell. It looks like there's really good advertising."

Campbell said the hot remedy products are still relatively young, too, and some consumers may still be leery of them.