REMEDIES ARE PROPOSED FOR OTC SALES EROSION

ELLIOT ZWEIBACH

CHICAGO -- Supermarkets must take aggressive actions to stop the steady sales erosion of over-the-counter medications to other formats, Michael Sansolo, the Food Marketing Institute's group vice president, told FMI's annual convention here last week.

Although supermarkets account for 39% of the total market available in OTC medication sales, that share drops to 20% on products recently switched from prescription to OTC, Sansolo said during the FMI Speaks presentation here.

"Drug stores are considered the primary sources of OTC products, and discount stores are gaining. Clearly, we have some marketing to do," he declared.

"Most shoppers don't even think of buying OTC drugs at the supermarkets, and many don't expect to find recently switched OTC products in supermarkets as quickly as drug stores," Sansolo explained.

Regardless of whether supermarkets have pharmacies, Sansolo offered four suggestions to halt the sales erosion:

· "Add new products as fast as they become available.

· "Be aware of the price points for you and your competition.

· "Be more aggressive in communicating what consumers can expect to find in your stores.

· "And if your store does have a pharmacy, be sure to include pharmacists in your marketing strategy and make good use of their expertise."

A prerecorded narrative sequence during the Speaks presentation pointed to a study's findings that if supermarkets are able to maintain their current 41% share of health and beauty care sales, they could achieve category sales of $41 billion by the year 2000 -- an increase of almost $30 billion from 1992.

The study was conducted by Willard Bishop Associates, Barrington, Ill.

"That $30 billion is how much we're trying to save through all our efforts on Efficient Consumer Response," the narrator of the sequence said. "If we just keep the share we currently have, we'll earn what we're hoping to save with all of ECR."

Market for HBC Products

1992

Total Market $34.5 billion

Supermarket Share $14.1 billion

2000 (projected)

Total Market $100 billion

Supermarket Share $41 billion

Decline of Supermarket HBC Share

Percentage Share

1986 44.2

1987 44.1

1988 43.6

1989 43.0

1990 42.3

1991 41.5

1992 41.0