Selection, deals attract CPG consumers
NEW YORK The economy’s effect on consumers’ shopping patterns isn’t all bad news for the drug channel. A recent report from Information Resources Inc. revealed that the drug channel’s share of consumer packaged goods sales was ahead 0.2 percentage points in each of the past years, and drug channel performance exceeded industry averages in nearly all departments.
“Drug stores have been improving their selection and are offering consumers some good deals,” said Sue Viamari, editor of IRI’s Times & Trends report. “I think we’ll see a lot more of a focus on affordability and value positioning going forward.” Viamari said deals like buy-one-get-one, larger packs and cross merchandising are becoming more common in the drug channel.
CVS has devoted an endcap to CVS ExtraCare Card deals from Kellogg’s, General Mills and Mrs. Fields. Shrink-wrapped two-packs of General Mills Nature Valley granola bars recently were promoted for $6.99 with a $3 ExtraCare reward, bringing the cost to the customer to $3.99. Mrs. Fields’ double pack of cookies was on sale for $5, with an additional $1 off for ExtraCare customers. Packaging on both products contains images of the ExtraCare card, and the endcap is defined with signage that highlights the savings available when consumers use the ExtraCare card.
General Mills also has created double packs for Rite Aid and prepriced value packs for Walgreens.
Product categories — particularly staples — that have a value image have been performing well in the channel. The wet soup category, for example, has been one of the fastest-growing categories in the drug channel for the last several years. Rodger Smith, VP growth channels for Campbell Soup Co., believes the category will continue to grow in the drug channel.
“Sales of Campbell's wet soup are growing in the drug channel, driven, in part, because consumers see Campbell's condensed soups as the ‘original value meal,’ as a stand-alone meal solution or as an ingredient in an inexpensive recipe,” Smith said.
Frozen foods also are performing well in the channel. “Within the drug channel, the strongest growth came from the frozen foods department,” said IRI’s Viamari. Frozen food unit sales were up 5% in the drug channel, while unit sales across food, drug and mass (including Walmart) were down 0.7%, according to IRI’s report.
As consumers continue to step up at-home meal preparation activity, frozen foods are expected to continue to play a big role in providing consumers with convenient and affordable meal solutions.