Drug channel overview

4,279 views

Published on

El mercado de farmacias en Estados Unidos està concentrado en un 84% en 3 grandes cadenas, Nielsen estudia cuales son las categorias de mayor crecimiento. El tabaco es una de las dos categorias de mayor crecimiento en espacio de gòndola y los contraceptivos la de mayor crecimiento en venta.

1 Comment
1 Like
Statistics
Notes
  • El mercado de farmacias en Estados Unidos està concentrado en un 84% en 3 grandes cadenas, Nielsen estudia cuales son las categorias de mayor crecimiento. El tabaco es una de las dos categorias de mayor crecimiento en espacio de gòndola y los contraceptivos la de mayor crecimiento en venta.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
4,279
On SlideShare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
99
Comments
1
Likes
1
Embeds 0
No embeds

No notes for slide
  • This slide uses total Retailer dollar volume. It includes non-UPC items.
  • Acculturated Hispanics & Asian Americans include only English-Speaking or Bilingual households.
  • Consider removing one of the channels & replacing with a key retailer.
  • New Product Opportunity: Pet Depilatories!
  • Drug channel overview

    1. 1. Nielsen Drug Channel Overview August, 2009 Tom Pirovano Jim Mansfield
    2. 2. Questions Addressed <ul><li>How big is the drug channel in the US? </li></ul><ul><li>Which demographic segments shop drug stores? </li></ul><ul><li>How do drug store purchase dynamics compare to other channels? </li></ul><ul><li>Which categories are strongest in drug stores? </li></ul><ul><li>How are drug store categories trending? </li></ul><ul><li>How are store brands performing in the drug channel? </li></ul><ul><li>How well does Walmart compete in HBC categories? </li></ul>Page
    3. 3. How big is the drug channel in the US?
    4. 4. Reported Dollar Volume By Channel Page Total Purchases (Including Non-UPC) Reported by Homescan Panelists Source: Homescan ® Channel Facts, CY’08
    5. 5. Drug Store Dollars vs. Other Channels Page Source: Nielsen Strategic Planner and Scantrack Convenience Express Reflects only categories reported by Nielsen 52 Weeks Ending 6/13/09, Total US Excludes Rx
    6. 6. Fewer Drug Stores – More Pharmacies Page U.S. Store Counts Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company Fewer Drug Stores Due to a Closings of Independent Pharmacies
    7. 7. QUIZ Question <ul><li>The top 3 U.S. drug chains now represent what percent of total drug channels sales? </li></ul>Page Answer: Walgreens, CVS & Rite Aid generate 82% drug channel ACV Source: TDLinx, December, 2008
    8. 8. Largest U.S. Drug Chains <ul><li>$ Share of U.S. # of </li></ul><ul><li>Drug Chain Drug Channel Stores </li></ul><ul><li>Walgreens 35.7% 6,796 </li></ul><ul><li>CVS/Caremark 31.5% 6,995 </li></ul><ul><li>Rite Aid 14.8% 4,829 </li></ul><ul><li>Duane Reade 1.1% 256 </li></ul><ul><li>Marc Glassman 0.4% 44 </li></ul><ul><li>Discount Drug Mart 0.3% 68 </li></ul><ul><li>United Drug Co-Op 0.3% 313 </li></ul><ul><li>Kinney Drugs 0.2% 88 </li></ul>Page Source: TDLinx The top 3 drug chains generate 82% of Drug Channel ACV.
    9. 9. Retailer Profile - Walgreens Page <ul><li>2009 Focus </li></ul><ul><li>Customer-Centric Retailing (CCR) format with fewer SKUs </li></ul><ul><li>CCR pilot now in 35 stores, 400 in Fall, 2009 </li></ul><ul><li>Private Brands </li></ul><ul><li>www.wbrand.com – Walgreens Private Brand Site </li></ul><ul><li>Plans to reduce the # of PB Brands </li></ul><ul><li>Currently >100 Walgreens Brands </li></ul><ul><li>Take Care Clinics (in stores) </li></ul><ul><li>>330 Take Care Clinics – and growing </li></ul><ul><li>www.takecarehealthsystem.com </li></ul><ul><li>Recent News: </li></ul><ul><li>Now in all 50 states with new Alaska Store </li></ul><ul><li>In early stages of bringing liquor back to its stores </li></ul>
    10. 10. Page Walgreens site dedicated to their private label: www.WBrand.com
    11. 11. Retailer Profile - CVS <ul><li>CVS Growth </li></ul><ul><li>2004 – Acquired 1,200+ Eckerd stores </li></ul><ul><li>2006 – Acquired 700 freestanding Osco & Savon stores </li></ul><ul><li>2007 – Merged with Caremark (prescription benefits management) </li></ul><ul><li>2009 – Acquired 541 Longs Drugs stores </li></ul><ul><li>Stores in 44 states </li></ul><ul><li>Claims to be #1 in prescriptions filled </li></ul><ul><li>Loyalty Card: >50 million ExtraCare members </li></ul><ul><li>Minute Clinics </li></ul><ul><li>Acquired Minute Clinic in 2006 </li></ul><ul><li>500 In-Store Clinics </li></ul><ul><li>Beauty 360 </li></ul><ul><li>High-end beauty format launched in November, 2008 </li></ul><ul><li>4 stores in California, Connecticut, and Washington, DC </li></ul>Page www.CVS.com www.MinuteClinic.com www.Beauty360.com
    12. 12. www.Beauty360.com from CVS Page
    13. 13. Retailer Profile – Rite Aid <ul><li>#1 drug chain on the East Coast, and third in the U.S. </li></ul><ul><li>In 31 States – East Coast & West Coast </li></ul><ul><li>2007 – acquired 1,854 Brooks & Eckerd stores </li></ul><ul><li>Partnership with GNC – in select stores </li></ul><ul><li>Closing “under-performing” stores </li></ul><ul><li>Opening new stores on smaller scale </li></ul><ul><li>Loyalty Program: Rx Savings Card </li></ul><ul><li>No Premium Store Brands </li></ul><ul><li>Focused on SKU Optimization </li></ul>Page www.Riteaid.com
    14. 14. Rite Aid’s “Living More” Card for Seniors <ul><li>20% off purchases on first Tuesday of month </li></ul><ul><li>10% off purchase all other Tuesdays </li></ul><ul><li>10% off Rite Aid Brand products every day </li></ul><ul><li>10% off cash prescriptions every day </li></ul>Page
    15. 15. QUIZ Question <ul><li>Which major U.S. market (city) generates the most drug store sales relative to other channels? </li></ul>Page Answer: Cleveland – The drug represents 8.6% of sales in Cleveland vs. 3.8% for Total U.S. Source: Homescan Channel-Facts, 2008
    16. 16. Drug Store Share of All-Outlet Sales Page Source: Homescan ® Channel Facts, CY’08 The drug channel is much stronger in Cleveland than in other markets.
    17. 17. Which demographic segments shop drug stores?
    18. 18. Household Ethnicity <ul><li>Drug stores, dollar stores and C-stores all skew to African Americans </li></ul><ul><li>Distribution of Dollar Sales </li></ul><ul><li>Mass w/o Super </li></ul><ul><li>HH Ethnicity Drug Grocery Supers Centers Club Dollar Conv </li></ul><ul><li>Caucasians 76% 80% 75% 82% 75% 70% 73% </li></ul><ul><li>Non-Cauc 24% 20% 25% 18% 25% 30% 27% </li></ul><ul><li>African Amer 13% 9% 11% 10% 9% 20% 16% </li></ul><ul><li>Asian* 3% 3% 3% 1% 5% 1% 1% </li></ul><ul><li>Other Race 8% 8% 11% 7% 12% 8% 10% </li></ul><ul><li>Hispanic* 11% 11% 15% 9% 16% 11% 11% </li></ul><ul><li>*Acculturated Hispanics & Asian Americans </li></ul>Page Source: Homescan ® Account Shopper Profiler, CY’08
    19. 19. Kids & Household Size <ul><li>Drug stores and C-stores and skew to smaller households without kids </li></ul><ul><li>Distribution of Dollar Sales </li></ul><ul><li>Mass w/o Super </li></ul><ul><li>Kids/HH Size Drug Grocery Supers Centers Club Dollar Conv </li></ul><ul><li>No Kids < 18 71% 59% 52% 53% 58% 59% 67% </li></ul><ul><li>Any Kids < 18 29% 41% 48% 47% 42% 41% 33% </li></ul><ul><li>Any Kids < 6 10% 15% 20% 18% 17% 13% 10% </li></ul><ul><li>Any Kids 6-12 15% 22% 27% 27% 22% 23% 18% </li></ul><ul><li>Any Kids 13-17 14% 19% 21% 22% 20% 21% 7% </li></ul><ul><li>1 Member 24% 17% 15% 14% 11% 20% 23% </li></ul><ul><li>2 Members 38% 33% 29% 32% 35% 32% 37% </li></ul><ul><li>3-4 Members 29% 36% 39% 38% 37% 33% 29% </li></ul><ul><li>5+ Members 9% 14% 17% 16% 17% 15% 11% </li></ul>Page Source: Homescan ® Account Shopper Profiler, CY’08
    20. 20. Household Income <ul><li>Lower income households are more likely to shop drug stores, dollar stores, C-stores and Supercenters </li></ul><ul><li>Distribution of Dollar Sales </li></ul><ul><li>Mass w/o Super </li></ul><ul><li>HH Income Drug Grocery Supers Centers Club Dollar Conv </li></ul><ul><li>$100K+ 18% 23% 23% 15% 36% 8% 10% </li></ul><ul><li>$70K-99K 16% 18% 18% 16% 22% 10% 13% </li></ul><ul><li>$50K-69K 16% 17% 17% 18% 16% 13% 14% </li></ul><ul><li>$40K-49K 10% 9% 10% 11% 8% 10% 11% </li></ul><ul><li>$30K-39K 11% 10% 11% 12% 7% 13% 13% </li></ul><ul><li>$20K-29K 13% 11% 10% 13% 6% 18% 16% </li></ul><ul><li><$20K 16% 12% 11% 15% 5% 27% 24% </li></ul>Page Source: Homescan ® Account Shopper Profiler, CY’08
    21. 21. Age of Female Household Head Page <ul><li>Drug stores skew to much older households </li></ul><ul><li>Age of Distribution of Dollar Sales </li></ul><ul><li>Female Mass w/o Super </li></ul><ul><li>HH Head Drug Grocery Super Centers Club Dollar Conv </li></ul><ul><li>Under 35 12% 17% 21% 22% 16% 13% 11% </li></ul><ul><li>35-44 13% 17% 20% 19% 18% 17% 15% </li></ul><ul><li>45-54 21% 23% 23% 22% 23% 23% 24% </li></ul><ul><li>55+ 37% 27% 25% 26% 29% 34% 26% </li></ul><ul><li>55-64 17% 14% 14% 15% 17% 19% 16% </li></ul><ul><li>65+ 20% 13% 11% 11% 12% 15% 10% </li></ul>Source: Homescan ® Account Shopper Profiler, CY’08
    22. 22. Spectra BehaviorScape Segmentation: Drug dollars skew to older households in urban areas Page Reference = United States; Base = Households; See Appendix for BehaviorStage/Lifestyle Descriptions Source: Spectra June 2009 Release/Nielsen Homescan Shopper Library (11/08) Dollars Index 120 - 149 = Dollars Index 150+ =
    23. 23. Where you live plays a huge role in the channels where you shop Page Reference = United States; Base = Households; See Appendix for Lifestyle Descriptions Source: Spectra June 2009 Release/Nielsen Homescan Shopper Library (11/08) Dollars Index 120 - 149 = Dollars Index 150+ =
    24. 24. How do drug store purchase dynamics compare to other channels?
    25. 25. Using Purchase Dynamics to Drive Sales <ul><li>3 Key Components of All Sales Growth/Decline </li></ul><ul><li>Penetration </li></ul><ul><ul><li>Are fewer households buying? </li></ul></ul><ul><ul><li>How can I get more households to buy? </li></ul></ul><ul><li>Purchase Frequency </li></ul><ul><ul><li>Are consumer buying less often? </li></ul></ul><ul><ul><li>How can I drive more frequent trips/purchases? </li></ul></ul><ul><li>Purchase Size </li></ul><ul><ul><li>Are shoppers spending less per trip? </li></ul></ul><ul><ul><li>How can I drive multiple units, larger pack sizes, or premium pricing? </li></ul></ul>Page
    26. 26. Channel Penetration Trends Vs. 1997 <ul><li>Percent of U.S. Households Shopping </li></ul><ul><li>U.S. Channel 2008 1997 Change </li></ul><ul><li>Drug Stores 81% 89% -8 Pts </li></ul><ul><li>Grocery 99% 100% -1 Point </li></ul><ul><li>Mass Merch w/Supers 95% 97% -2 Pts </li></ul><ul><li>Supercenters 68% 52% +16 Pts </li></ul><ul><li>Mass w/o Supers 79% 94% -15 Pts </li></ul><ul><li>Warehouse Clubs 50% 48% +2 Pts </li></ul><ul><li>Convenience Stores 40% 52% -12 Pts </li></ul><ul><li>Dollar Stores 64% 45% +19 Pts </li></ul>Page Source: Homescan ® Channel Facts, CY’08 Vs. CY’97
    27. 27. Purchase Frequency Trends Vs. 1997 <ul><li>Avg Number of Shopping Trips Per Shopper Per Year </li></ul><ul><li>U.S. Channel 2008 1997 Change </li></ul><ul><li>All Outlets 159 198 -39 Trips </li></ul><ul><li>Drug Stores 14 16 -2 Trips </li></ul><ul><li>Grocery 59 87 -28 Trips </li></ul><ul><li>Mass Merch w/Supers 31 33 -2 Trips </li></ul><ul><li>Supercenters 26 13 +13 Trips </li></ul><ul><li>Mass w/o Supers 14 27 -13 Trips </li></ul><ul><li>Warehouse Clubs 11 9 +2 Trips </li></ul><ul><li>Convenience Stores 14 13 +1 Trip </li></ul><ul><li>Dollar Stores 13 8 +5 Trips </li></ul>Page Source: Homescan ® Channel Facts, CY’08 Vs. CY’97
    28. 28. Purchase Size Trends Vs. 1997 <ul><li>Average Dollars Spent Per Trip (UPC-Coded) </li></ul><ul><li>U.S. Channel 2008 1997 Change </li></ul><ul><li>Total Outlets $38 $25 +$13 </li></ul><ul><li>Drug Stores $20 $15 +$5 </li></ul><ul><li>Grocery $31 $22 +$9 </li></ul><ul><li>Mass Merch w/Supers $52 $29 +$23 </li></ul><ul><li>Supercenters $58 $36 +$22 </li></ul><ul><li>Mass w/o Supers $43 $28 +$15 </li></ul><ul><li>Warehouse Clubs $89 $66 +$23 </li></ul><ul><li>Convenience Stores $15 $7 +$8 </li></ul><ul><li>Dollar Stores $12 $9 +$3 </li></ul>Page Source: Homescan ® Channel Facts, CY’08 Vs. CY’97
    29. 29. How are drug store categories performing? <ul><li>Cross-Category Analysis Using Nielsen’s Strategic Planner Database </li></ul><ul><li>52-Week Periods Ending 6/13/09 </li></ul><ul><li>Total U.S. Drug Channel (stores with annual sales >$1MM) </li></ul><ul><li>Compared with FDM (Food/Drug/Mass Channels Including Walmart) </li></ul><ul><li>Product Sub-Categories Exclude Some Smaller or “All Other” Groups </li></ul>
    30. 30. The drug channel shows healthy growth across most departments <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen-Defined Departments Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>All Departments $43.4 Billion +5% 8.5% </li></ul><ul><li>Health & Beauty Aids $21.5 Billion +4% 34.6% </li></ul><ul><li>Dry Grocery $7.9 Billion +8% 4.1% </li></ul><ul><li>Non-Food Grocery $6.7 Billion +13% 11.3% </li></ul><ul><li>General Merchandise $3.6 Billion -5% 9.5% </li></ul><ul><li>Alcoholic Beverages $2.4 Billion +5% 11.1% </li></ul><ul><li>Dairy $0.6 Billion -7% 1.2% </li></ul><ul><li>Frozen Foods $0.4 Billion +12% 1.0% </li></ul><ul><li>Other Perishable $0.08 Billion +17% 0.2% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S.
    31. 31. QUIZ Question <ul><li>Do drug channel shoppers spend more on cold/allergy remedies or on cigarettes? </li></ul>Page Answer: They spend nearly twice as much on cigarettes than on cold/allergy remedies. Source: Nielsen Strategic Planner
    32. 32. Top Categories in the Drug Channel <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Cigarettes $2,963 MM +18% 36% </li></ul><ul><li>Cold/Allergy Remedies $1,599 MM +9% 46% </li></ul><ul><li>Nutritional Supplements $1,260 MM +8% 34% </li></ul><ul><li>Headache Remedies $965 MM +3% 36% </li></ul><ul><li>Chocolate Candy $894 MM +6% 22% </li></ul><ul><li>Office/School Supplies $699 MM +1% 15% </li></ul><ul><li>Face Cream & Lotions $692 MM +9% 37% </li></ul><ul><li>Non-Chocolate Candy $640 MM +11% 24% </li></ul><ul><li>Antacids $625 MM +0% 37% </li></ul><ul><li>Batteries $619 MM +2% 24% </li></ul><ul><li>Light Beer $599 MM +10% 10% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S. 6 of the top 11 drug store categories are non-HBC
    33. 33. Top HBC Categories in the Drug Channel <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Cold/Allergy Remedies $1,599 MM +9% 46% </li></ul><ul><li>Nutritional Supplements $1,260 MM +8% 34% </li></ul><ul><li>Headache Remedies $965 MM +3% 36% </li></ul><ul><li>Face Cream & Lotions $692 MM +9% 37% </li></ul><ul><li>Antacids $625 MM +0% 37% </li></ul><ul><li>Cosmetics - Eye Makeup $549 MM +8% 38% </li></ul><ul><li>Hair Coloring Products $549 MM +1% 36% </li></ul><ul><li>Cosmetics - Facial Makeup $504 MM +5% 39% </li></ul><ul><li>Laxatives $493 MM +5% 44% </li></ul><ul><li>Tooth Cleaners/Whiteners $433 MM +1% 21% </li></ul><ul><li>Shampoo $429 MM +1% 20% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S.
    34. 34. Top Food Categories in the Drug Channel <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Chocolate Candy $894 MM +6% 22% </li></ul><ul><li>Non-Chocolate Candy $640 MM +11% 24% </li></ul><ul><li>Light Beer $599 MM +10% 10% </li></ul><ul><li>Beer (Non-Light) $485 MM +1% 11% </li></ul><ul><li>Bottled Water $460 MM +3% 8% </li></ul><ul><li>Fresh Milk $426 MM -12% 3% </li></ul><ul><li>Chewing Gum $328 MM +10% 19% </li></ul><ul><li>Wine - Domestic Table $317 MM +14% 7% </li></ul><ul><li>Cola Regular $310 MM +6% 6% </li></ul><ul><li>Cola Diet $255 MM +6% 7% </li></ul><ul><li>Vodka $248 MM +5% 24% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S. 8 of the top 11 food categories are beverages
    35. 35. Top Growth Categories in the Drug Channel <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Pet Care $147 MM +67% 6.7% </li></ul><ul><li>Depilatories $84 MM +46% 44.7% </li></ul><ul><li>Peanut Butter $15 MM +43% 1.2% </li></ul><ul><li>Seasonal General Merch $21 MM +42% 15.1% </li></ul><ul><li>Dog & Cat Treats $39 MM +42% 2.5% </li></ul><ul><li>Natural Cheese $11 MM +39% 0.2% </li></ul><ul><li>Frozen Entrees - Italian $15 MM +37% 0.6% </li></ul><ul><li>Pizza - Frozen $47 MM +34% 1.2% </li></ul><ul><li>Desserts - Frozen $17 MM +30% 2.9% </li></ul><ul><li>Sliced Lunchmeat $13 MM +28% 0.3% </li></ul><ul><li>Tuna - Canned $19 MM +28% 1.5% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S. 8 of the top 11 growth categories are foods
    36. 36. QUIZ Question <ul><li>Which category has the highest share of sales in the drug channel vs. supermarkets & mass merchandisers? </li></ul>Page Answer: Contraceptives Drug channel generates 64% of F/D/M $ sales Source: Nielsen Strategic Planner
    37. 37. Categories With Strong Sales in the Drug Channel <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Contraceptives $315 MM +17% 64% </li></ul><ul><li>Pregnancy/Infertility Tests $152 MM +1% 63% </li></ul><ul><li>Hair Growth Products $54 MM +7% 61% </li></ul><ul><li>First Aid Gauze & Tape $132 MM +0% 57% </li></ul><ul><li>Breath Fresheners $4 MM +9% 57% </li></ul><ul><li>Cough/Cold Throat Sprays $18 MM -4% 51% </li></ul><ul><li>Nasal Products $298 MM +3% 50% </li></ul><ul><li>Anti-Smoking Products $366 MM +1% 49% </li></ul><ul><li>Manicure Needs $117 MM +3% 49% </li></ul><ul><li>Cough Syrups/Tabs $332 MM +6% 48% </li></ul><ul><li>Vitamins/Tonics (Liq/Pwdr) $21 MM +11% 48% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S. As expected, categories with high drug share are almost all HBC.
    38. 38. HBC categories with strong sales OUTSIDE the drug channel <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category Drug $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Baby & Nursing Accs $37 MM +0% 3.6% </li></ul><ul><li>Baby Bottles & Nipples $20 MM -1% 9.2% </li></ul><ul><li>Diet Aids-Complete Nutr $41 MM -7% 9.3% </li></ul><ul><li>Baby Care Bathsoap $21 MM +9% 16.1% </li></ul><ul><li>Feminine Deodorant Sprays $6 MM -10% 16.4% </li></ul><ul><li>Personal Grooming Sponges $21 MM +9% 18.3% </li></ul><ul><li>Deodorant-Aerosol $25 MM -0% 19.1% </li></ul><ul><li>Deodorant-Stick/Solid $289 MM +8% 19.4% </li></ul><ul><li>Cotton/Cotton Swabs $76 MM +4% 19.6% </li></ul><ul><li>Vitamins - Children Chewable $32 MM +9% 19.8% </li></ul><ul><li>Shampoo $429 MM +1% 20.2% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total U.S. These categories may be opportunities for drug retailers
    39. 39. QUIZ Question <ul><li>Which 2 categories show the most growth for drug store share of FDM? </li></ul>Page Answer: Tobacco & Feminine Hygiene (drug channel is up 3.4 share points in both categories) Source: Nielsen Strategic Planner
    40. 40. The drug channel has grown share across many high-volume categories. <ul><li>Drug Dollar Share of Share </li></ul><ul><li>Nielsen Category Food/Drug/Mass+WM Pt Chg </li></ul><ul><li>Tobacco & Accessories 34% +3.4 pts </li></ul><ul><li>Feminine Hygiene 44% +3.4 pts </li></ul><ul><li>Grooming Aids 36% +2.3 pts </li></ul><ul><li>Fragrances - Women 41% +2.1 pts </li></ul><ul><li>Family Planning 64% +2.1 pts </li></ul><ul><li>Pet Care 5% +1.6 pts </li></ul><ul><li>Shaving Needs 24% +1.3 pts </li></ul><ul><li>Cosmetics 41% +1.1 pts </li></ul><ul><li>Cough & Cold Remedies 46% +1.1 pts </li></ul><ul><li>Pain Remedies 37% +1.1 pts </li></ul><ul><li>Skin Care Preparations 34% +1.1 pts </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total US
    41. 41. Drug Channel Growth By Market Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09 US Drug Channel Total Store: +4.9% HBC: +3.5%
    42. 42. How are store brands performing in the drug channel?
    43. 43. Across channels, store brands continue to grow <ul><li>Private Label Performance through 6/13/09 </li></ul><ul><ul><li>Annual Sales: $85.7 Billion </li></ul></ul><ul><ul><li>PL $ Share of Store: 16.8% (Up 0.8 Pts) </li></ul></ul><ul><ul><li>$ Sales Up $6.3 Billion (+8.0%) vs. Year Ago </li></ul></ul><ul><ul><li>Up $13.9 Billion (+19%) vs. Two Years Ago </li></ul></ul><ul><li>Source: Nielsen, Total U.S. Grocery/Drug/Mass Including Walmart </li></ul>Page
    44. 44. PL growth was driven at first by higher prices, but in 2008, unit growth indicates real shifting Source: Nielsen Strategic Planner, Total U.S. FDMxWM 2007 Higher Prices Drive PL Growth 2008+ Real Shifting from Brands to PL
    45. 45. Drug private label is not as strong as store brands in grocery and mass channels <ul><li>PL $ Share PL Share </li></ul><ul><li>Channel of Store Pt Chg </li></ul><ul><li>Grocery Channel 18.7% +1.0 pts </li></ul><ul><li>Drug Channel 13.7% +1.0 pts </li></ul><ul><li>Wal-Mart 15.8% +0.5 pts </li></ul><ul><li>Convenience Channel 1.5% +0.1 pts </li></ul>Page Source: Nielsen Strategic Planner & Scantrack Convenience, Total US, 52 Weeks Ending 6/13/09
    46. 46. Top-Selling Private Label Categories in the Drug Channel <ul><li>52-Week Chg Vs Share of </li></ul><ul><li>Private Label Category Drug $ Sales Yr Ago Category </li></ul><ul><li>PL Cold/Allergy Remedies $396 MM +20% 25% </li></ul><ul><li>PL Nutritional Supplements $259 MM +14% 21% </li></ul><ul><li>PL Headache Remedies $244 MM +10% 25% </li></ul><ul><li>PL Batteries $169 MM +15% 27% </li></ul><ul><li>PL Anti-Smoking Products $166 MM +7% 45% </li></ul><ul><li>PL Laxatives $161 MM +7% 33% </li></ul><ul><li>PL Antacids $150 MM +59% 24% </li></ul><ul><li>PL Adult Incontinence $143 MM +11% 39% </li></ul><ul><li>PL First Aid Treatments $138 MM +11% 34% </li></ul><ul><li>PL Nuts - Cans $129 MM +18% 64% </li></ul><ul><li>PL Office/School Supplies $119 MM +9% 17% </li></ul>Page Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total US Drug Channel
    47. 47. Top Private Label Categories For Sales Growth in the Drug Channel <ul><li>52-Week Chg Vs Share of </li></ul><ul><li>Private Label Category Drug $ Sales Yr Ago Category </li></ul><ul><li>PL Pet Care $16 MM +170% 11% </li></ul><ul><li>PL Laundry Detg – HD Liq $22 MM +121% 7% </li></ul><ul><li>PL Antacids $150 MM +59% 24% </li></ul><ul><li>PL Fabric Softeners $10 MM +45% 15% </li></ul><ul><li>PL Face Cream & Lotions $36 MM +43% 5% </li></ul><ul><li>PL Cookies $36 MM +38% 17% </li></ul><ul><li>PL Garbage Bags $40 MM +30% 45% </li></ul><ul><li>PL Hsehold Sponges/Cloths $12 MM +29% 24% </li></ul><ul><li>PL Paper Towels $52 MM +29% 25% </li></ul><ul><li>PL Sinus Remedies $20 MM +24% 32% </li></ul><ul><li>PL Pretzels $12 MM +23% 28% </li></ul>Page Strong growth in several categories Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total US Drug Channel
    48. 48. QUIZ Question <ul><li>Which category has the highest private label share in the drug channel? </li></ul>Page Answer: Canned Nuts 64% of drug channel sales are from store brands Source: Nielsen Strategic Planner
    49. 49. Drug Channel Categories with the Highest Private Label Share <ul><li>52-Week Chg Vs Share of </li></ul><ul><li>Private Label Category Drug $ Sales Yr Ago Category </li></ul><ul><li>PL Nuts - Canned $129 MM +18% 64% </li></ul><ul><li>PL Disposable Plates/Cups $50 MM +10% 63% </li></ul><ul><li>PL Nuts - Cello Wrapped $55 MM +15% 56% </li></ul><ul><li>PL Cotton & Swabs $42 MM +6% 56% </li></ul><ul><li>PL Prsnl Grooming Sponges $11 MM +7% 51% </li></ul><ul><li>PL Nuts - Jars $15 MM -5% 50% </li></ul><ul><li>PL Anti-Smoking Products $166 MM +7% 45% </li></ul><ul><li>PL Garbage Bags $40 MM +30% 45% </li></ul><ul><li>PL Adult Incontinence $143 MM +11% 39% </li></ul><ul><li>PL Fruit - Dried & Snacks $10 MM -4% 39% </li></ul><ul><li>PL Light Bulbs $32 MM -2% 38% </li></ul>Page Store brands dominate a wide variety of categories in the drug channel. Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total US Drug Channel
    50. 50. How well does Walmart compete in HBC categories?
    51. 51. Drug Channel Private Label Share Vs. Walmart <ul><li>Drug Walmart Share </li></ul><ul><li>Private Label Category PL Share PL Shr Gap </li></ul><ul><li>PL Anti-Smoking Products 45% 71% 26 pts </li></ul><ul><li>PL Hair Growth Products 32% 53% 21 pts </li></ul><ul><li>PL Mineral Supplements 34% 52% 18 pts </li></ul><ul><li>PL Oral Antiseptics/Rinses 14% 27% 13 pts </li></ul><ul><li>PL Vitamins/Tonics – Liq/Pwdr 10% 23% 13 pts </li></ul><ul><li>PL Talc & Dusting Powder 16% 26% 10 pts </li></ul><ul><li>PL Adult Multi-Vitamins 28% 36% 8 pts </li></ul><ul><li>PL Nutritional Supplements 21% 28% 7 pts </li></ul><ul><li>PL Headache Remedies 25% 32% 7 pts </li></ul><ul><li>PL Diet Aids-Complete Nutri 0% 6% 6 pts </li></ul><ul><li>PL Cosmetics - Nail Care 7% 12% 5 pts </li></ul><ul><li>PL Antacids 24% 29% 5 pts </li></ul>Page Many store brands in the drug channel are under-developed relative to Walmart. Source: Nielsen Strategic Planner, 52 Weeks Ending 6/13/09, Total US Drug Channel
    52. 52. Top HBC Categories at Walmart <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category WM $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Nutritional Supplements $1,252 MM +6% 33% </li></ul><ul><li>Cold/Allergy Remedies $803 MM +5% 23% </li></ul><ul><li>Shampoo $742 MM -6% 35% </li></ul><ul><li>Headache Remedies $724 MM -3% 27% </li></ul><ul><li>Tooth Cleaners & Whiteners $643 MM -1% 31% </li></ul><ul><li>Blade/Razors/Razor Blades $561 MM -4% 37% </li></ul><ul><li>Deodorant-stick/Solid $559 MM +3% 38% </li></ul><ul><li>Face Cream & Lotions $547 MM -3% 29% </li></ul><ul><li>Hair Coloring Products $511 MM -5% 34% </li></ul><ul><li>Hand Cream & Body Lotions $483 MM +6% 35% </li></ul><ul><li>Cosmetics - Eye Makeup $469 MM -1% 32% </li></ul>Page Source: Nielsen Walmart Channel, 52 Weeks Ending 6/13/09, Total U.S.
    53. 53. HBC Categories with the Highest Share at Walmart <ul><li>52-Week Change Share of </li></ul><ul><li>Nielsen Category WM $ Sales Vs Ygo FDM+WM </li></ul><ul><li>Feminine Deodorant Sprays $22 MM -11% 58% </li></ul><ul><li>Men’s Gift Sets & Travel Kits $75 MM +43% 53% </li></ul><ul><li>Cologne/Lotion – Men’s $122 MM -15% 51% </li></ul><ul><li>Personal Grooming Sponges $56 MM +2% 50% </li></ul><ul><li>Ethnic Hair Preparations $76 MM +0% 49% </li></ul><ul><li>Appetite Suppressants $118 MM -25% 48% </li></ul><ul><li>Deodorant-Cologne Type $88 MM +5% 48% </li></ul><ul><li>Baby Care - Oils/Lotions $60 MM +3% 42% </li></ul><ul><li>Deodorant-Aerosol $54 MM -5% 41% </li></ul><ul><li>Denture Products $165 MM -1% 40% </li></ul><ul><li>Douches $19 MM -28% 40% </li></ul>Page Source: Nielsen Walmart Channel, 52 Weeks Ending 6/13/09, Total U.S.
    54. 54. 400 Walmart In-Store Health Clinics by 2010 <ul><li>“The Clinic at Walmart” brand </li></ul><ul><li>First clinics opened April-08 in Atlanta </li></ul><ul><li>Co-branded with local hospitals </li></ul><ul><li>Average visit: $50 - $65 </li></ul>Page
    55. 55. In Beta Test: Online Groceries & HBC <ul><li>Now lists many HBC & food products at Walmart.com </li></ul><ul><li>HBC & Food not yet available for sale online </li></ul><ul><li>Product details include… </li></ul><ul><ul><li>Package photos </li></ul></ul><ul><ul><li>Ingredients </li></ul></ul><ul><ul><li>Full Nutritional Facts </li></ul></ul><ul><ul><li>Usage Instructions </li></ul></ul><ul><ul><li>Allergy/Interaction Warnings </li></ul></ul><ul><ul><li>Customer Product Reviews </li></ul></ul>Page Customer product reviews may be a game-changer for CPG manufacturers
    56. 56. Summary <ul><li>Drug stores generate $43.4 billion annually excluding Rx </li></ul><ul><li>The top 3 chains generate 82% of drug channel ACV </li></ul><ul><li>Walgreens & Rite Aid focusing on efficient assortment </li></ul><ul><li>Drug dollars skew to older households in urban areas </li></ul><ul><li>Consumers make fewer shopping trips across channels </li></ul><ul><li>Cigarettes are the top category in the drug channel </li></ul><ul><li>HBC growth has not kept up with total store growth in the drug channel </li></ul><ul><li>FDM private label dollars are up 19% vs. 2 years ago </li></ul><ul><li>Walmart is a major player in HBC categories </li></ul>Page
    57. 57. Thank you Questions?

    ×