THE HBC QUESTION

David Merrefield

Have supermarket retailers given up on the health and beauty care category?

Let's hope not -- and perhaps that question is a bit overdrawn -- but, at the same time, there are more than a few indications that something like that is going on. There's no need to waste much ink reviewing the fact that the category -- once a major industry cash generator -- is now slumping in supermarkets.

Surveys published lately in SN have shown in stark detail that supermarkets' dollar market share in HBC is draining away to discounters and other classes of trade.

But a couple of developments bring up this parallel issue: Maybe food retailers find it easier to simply relinquish the category to other classes of trade than to fight for the business.

Should that be the case, it's a big positioning mistake given the importance of supermarkets' offer of shopping convenience, low prices, the HBC-pharmacy synergy and strategic considerations of the like that will only grow in importance in the future. But look at what's happening when it comes to supermarket retailer attendance at HBC-related trade shows, starting with the Exclusively HBA show of recent days in Chicago. As a news article on Page 45 points out, it was quite difficult to score actual sightings of supermarket retailers at the show. The article was written by SN Section Editor Christina Veiders.

Naturally, there are many factors controlling whether supermarket retailers go to any particular show or not, and it should be acknowledged that total show activity has been declining in recent years, whether measured by number of booths or net buyer attendance. Be that as it may, discount-store attendance was quite conspicuous as virtual platoons of buyers from Wal-Mart Stores and Target Stores patrolled show-floor aisles. By the numbers, the percentage of discount-store buyers at the show was fully twice that represented by the food trade.

Apart from the numbers, during SN floor interviews with vendors at the show, many mentioned not just the lack of supermarket buyers at the event, but the general lack of merchandising commitment to the category evinced by supermarket retailers over time.

Among the factors vendors mentioned as hobbling supermarkets' HBC efforts were: lack of buying expertise, lack of commitment to sufficient stockkeeping units, lack of upper-management commitment to the category, too few products for children and other factors. None of these observations is particularly new, but all remain true. And, by the way, it's not just Exclusively HBA that's having trouble attracting interest from supermarket HBC buyers and merchandisers. The industry's own Food Marketing Institute is performing radical surgery on its GM/HBC conference in a bid to change it in ways that will make it more attractive to buyers. FMI went so far as to drop retailer and wholesaler registration fees through the end of last month to bolster such attendance for the show, to be held in Philadelphia Oct. 8 to 10. Incidentally, Exclusively HBA has never charged buyer attendees.

Do these factors illuminate a trend toward supermarkets looking the other way when it comes to striving for increased HBC sales? Let's hope not. The category is simply of too great strategic importance to relinquish to any other class of trade.

And, after all, why relinquish it? Discount-store operators are no more resourceful than supermarket operators. Whatever methods they have developed to win customer appeal can be improved upon and used to greater advantage by supermarket operators.