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West Virginia retailers are seeking to oust meth makers statewide

BY Michael Johnsen

CVS/pharmacy replaced single-ingredient pseudoephedrine products with the tamper-resistant PSE product, Zephrex-D, in all of its West Virginia stores, as well as stores in nearby states that are located within 15 miles of West Virginia's border, including Kentucky, Maryland, Ohio, Pennsylvania and Virginia. 
 
With the move, West Virginia has become a de facto test market for the diversion-defiant PSE formulation, because along with CVS/pharmacy, Rite Aid and Fruth and soon Walgreens will all be selling similar formulations. The move sends a stern message to West Virginian methamphetamine makers to the tune of Tom Petty's "Don't come around here no more." 
 
But West Virginia has been gearing up to put meth labs out of business for good all year long. Earlier this year, West Virginia legislators debated making pseudoephedrine-containing products prescription-only excepting formulations like Zephrex-D. And while that bill died in March, according to reports, it's clear that West Virginia is looking to uproot and eliminate clandestine methamphetamine production labs. 
 
According to the West Virginia Gazette, West Virginia authorities seized 533 meth labs last year, a record number. Police found the clandestine labs in 45 of the state's 55 counties. 
 
West Virginia is a NPLEx state, which is another tool the state has been using successfully to curb its methamphetamine problem. That tool has proven effective as well. According to data obtained by the Kanawha County Substance Abuse Task Force (where meth crime is traditionally the highest in the state), implementing NPLEx resulted in a 68.5% reduction in pseudoephedrine sales across the county. According to a May 22 article in the Charleston Gazette, meth lab busts statewide are down 27% January through mid-April, compared with the same period last year. 
 
From a business perspective, the move will not preclude customers legitimately looking for congestion relief from seeking their PSE remedy. Nationwide, sales of the three top-selling pseudeophedrine products were down slightly to $322 million for the 52 weeks ended May 18, according to IRI across total U.S. multi-outlet channels. The fact is, there aren't very many heavy buyers of PSE products across the state. According to the West Virginia Gazette, only about 4% of West Virginians last year purchased more than 24 grams of PSE, the equivalent of about 10 boxes, citing the state Board of Pharmacy. 
 
The biggest factor impacting PSE sales will remain the volatility of the cough/cold season — the more cold-stricken people there are the better these formulations (now just Zephrex-D in West Virginia) will sell. 
 
 

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Study: Higher-income shoppers turn to warehouse clubs for quality

BY Antoinette Alexander

CHICAGO — Not only do higher income shoppers flock to warehouse clubs in a quest for quality, but private-label brands at warehouse clubs are believed to be comparable in terms of quality compared with name brand items, according to new research from Mintel.

According to Mintel, 38% believe store brand or private label brands at warehouse clubs are comparable to name brand items in terms of quality — a number that increases to 44% of households earning $150,000 or more. That’s the highest percentage of all income groups surveyed, compared with 27% of those earning less than $25,000, 36% of those earning $50,000 to $74,900, and 41% of those with incomes between $100,000 to $149,900.
 
Furthermore, 40% of warehouse club users say warehouse clubs carry quality products — with 46% of households with an income of more than $150,000 or more reporting as much. The number drops to 32% for those earning less than $25,000, 41% of those earning $50,000 to $74,900, and 42% of those with household incomes between $100,000 to $149,900.

“Shoppers in this group may be more likely to shop across a wider variety of retail stores, and therefore more aware of the price differential among retailers,” stated Ali Lipson, category manager for retail, apparel, technology and automotive at Mintel. “They are also more likely to be able to afford the shopping trip compared to those with lower incomes. Product messaging and signage that highlights the quality of warehouse club products is sure to resonate with this demographic.”

This market also might be immune to threat of online shopping, as 63% of Americans have shopped (in-store) at a warehouse club in the last six months, but only 25% have done so online.

“One deterrent to online shopping in this channel could be that stores offer bulk- sized packages so the cost of shipping large items could prove prohibitive,” noted Lipson. “Additionally, part of the appeal of warehouse club shopping is the ‘treasure hunt’ aspect, or discovering unique items throughout the store. Currently, the warehouse clubs’ online model is unable to replicate this experience.”

More than one-third (36%) of warehouse club shoppers agree that they like finding unique items when shopping at warehouse clubs. This number increases significantly for women aged 55 and older, with 45% of that demographic reporting as much. The least likely bargain hunters at 30% are women aged 18 to 34.

“More than half of warehouse club shoppers like to browse the selections, and 48% say it is worth paying the membership fee to shop at a warehouse club,” added Lipson. “Warehouse clubs intentionally offer a unique product mix aiming to appeal to the ‘discovery’ experience many shoppers crave. It also helps encourage repeat visits, as product selections can vary from time to time.”

The research also found that 11% of those surveyed said an app that helps them navigate the store and find items would encourage them to visit warehouse clubs more often or sign up for a membership. Meanwhile, 12% agree that sales associates with handheld devices that can provide checkout anywhere in the store would increase their usage.
 

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Unilever sells Slim-Fast to private equity firm

BY Michael Johnsen

LONDON — Unilever on Thursday announced that it has sold its Slim-Fast brand to Kainos Capital. Unilever will retain a minority stake in the business.
 

“The Slim-Fast sale is the last step in the portfolio reshaping that we had planned for North America," stated Kees Kruythoff, president Unilever North America. "This transaction, along with previously announced divestitures, will give us the focus to drive growth behind our core portfolio.”
 
Sales of Slim-Fast 321 Plan ready-to-drink diet aids totaled $127.7 million, down 13.6%, for the 52 weeks ended May 18 across across total U.S. multi-outlet channels, according to IRI. Sales of the company's Slim-Fast 321 Plan snack bar totaled $7.1 million and were down 37.9%. 
 
The transaction includes the Slim-Fast trademark and the global Slim-Fast business portfolio. Terms of the transaction were not disclosed.
 

 

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