Kline report: OTC growth sharper across online, c-stores and dollar versus mainstream stores

PARSIPPANY, N.J. — Sales of over-the-counter medicines through alternate retail channels have grown by a compound annual growth rate of 9.4% from 2006 through 2011, far exceeding the 2.4% overall growth rate through all retail outlets, noted Kline in a report released Monday. Online sales saw the highest increase with a CAGR of 16.1%.

The U.S. retail industry remains highly consolidated with a fairly small number of large retail chains that continue to dominate OTC distribution. The three main retail outlets consisting of drug stores, mass merchandisers and food stores combined account for about 84% of OTC sales; however, other outlets, such as online, convenience stores, dollar stores and warehouse clubs, are kicking up the competition across several categories and account for nearly 15% of the OTC retail market.



"Growth opportunities within the retail environment should be explored on individual channel and category bases," stated Laura Mahecha, Kline’s healthcare practice industry manager. "While some of the alternate channels ... can offer opportunity for growth in select categories and for certain brands, several other alternate retail channels ostensibly aren't prime candidates for an increase of branded OTC sales.”



For example, vitamins, minerals, herbal products and such OTCs as pain relievers — products that consumers like to stock in their medicine cabinets — have a high rate of online purchase. However, OTC products for an immediate need, such as allergy relief, cough and cold preparations, and digestive products, tend to be purchased more often at brick-and-mortar stores, according to Kline. 


Interested in this topic? Sign up for our weekly Collaborative Care e-newsletter.

Login or Register to post a comment.