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CDMA to host a product showcase for members in Philly

BY Michael Johnsen

NOVI, Mich. — The Chain Drug Marketing Association recently announced that the debut of its “Make More Money Table Top Show” will take place in Philadelphia from Sept. 23 to 24. The show will provide CDMA-member regional drug chains, regional drug wholesalers and independent pharmacies an opportunity to preview table-top displays of CDMA’s hot items, with items from various categories, including seasonal, health-and-beauty and soft goods, among others. 

This first-time event for the CDMA will be held in conjunction with the annual True Value Fall Market. The association also will be hosting a “Best of the Best” lunch on Sept. 23 and an “Idea Exchange” breakfast on Sept. 24.

CDMA has arranged an 11,000-sq.-ft. space to display selected products on behalf of suppliers. The show will showcase suppliers’ new product launches, promotional goods, counter-top displays, floor displays and clip strip opportunities. The designated area will include product samples, catalogs, sell sheets and order forms.

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Procter & Gamble posts fourth-quarter results

BY Antoinette Alexander

CINCINNATI — Procter & Gamble announced on Friday double-digit growth in fourth-quarter net sales and earnings.

Net sales for the quarter rose 10% to $20.9 billion. Organic sales, which exclude the impact of acquisitions, divestitures and foreign exchange, grew 5% for the quarter.

Net earnings totaled $2.5 billion, or 84 cents per diluted share, compared with $2.2 billion, or 71 cents per diluted share, in the year-ago period.

In beauty, net sales rose 7% to $5.1 billion, on 1% volume growth. Organic volume, which excludes the net impact of Zest, Infasil and minor fragrance divestures, increased 2% and organic sales grew 3%. Volume growth was driven by high single-digit growth in developing regions, while volume in developed regions was down mid-single digits.

Volume in retail hair care grew low single digits behind initiative activity and distribution expansions in Asia, Latin America and Western Europe, partially offset by a double-digit decline in North America because of the Pantene restage in the base period, P&G said.

Volume in female beauty grew low single digits as Olay skin care distribution expansion in Asia and Central Eastern Europe Middle East and Africa (CEEMEA) was partially offset by a low single-digit decline in developed markets driven by the Zest and Infasil divestitures, competitive activity in North America cosmetics and decreased shipments in North America skin because of the Olay UV line reformulation.

In the grooming segment, net sales rose 7% to $2.1 billion on a 1% increase in volume. Organic sales increased 1%. Price increases added 2% to net sales growth behind blades and razors price increases across all regions and inflationary pricing in Latin America. Volume growth was driven by mid-single-digit growth in developing regions, which was partially offset by a mid-single-digit decline in developed regions.

Volume in male grooming increased low single digits, primarily due to growth of blades and razors in developing regions — particularly Latin America and Asia — partially offset by a decline in developed markets due to the base period impacts of the U.S. Fusion ProGlide launch, the company said.

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Report: Purchase frequency in drug channel up 6.7%

BY Michael Johnsen

CHICAGO — Despite gas prices being more than 30% higher than last year, cross-channel shopping is alive and well in the consumer packaged goods industry, according to a SymphonyIRI Group report released Thursday.

Three-quarters of today’s consumers shop across five or more channels to meet their ongoing CPG needs. Consumers’ cross-channel quest for affordability clearly underscores the mindset of today’s shoppers, where learning to live with less and making purchases deliberately and cautiously has become the norm, the retail analytics firm noted in its latest Times & Trends Report, “Channel Migration: A Quest for Affordability.”

During the beginning of the economic downturn, shoppers flocked to value retailers, particularly supercenters and mass merchandisers, demonstrating a willingness to drive the extra distance in an effort to save money. Today, grocery, drug, dollar and club stores are enjoying increased shopper visits, at the expense of supercenter and mass stores. Share trends reflect these shifts in shopper behavior.

“Channel shifting will continue, and channels will continue to blur,” SymphonyIRI SVP marketing John McIndoe said. “The blurring is the result of consumer changes, and also of changing CPG manufacturer and retailer strategies. New products, new marketing programs and new store formats are what keep CPG interesting and also what makes the job of CPG marketers so difficult.”

Across CPG channels, purchase frequency increased 2% during the past year, with grocery, dollar and club channel trends closely mirroring industry average. Across other channels, though, trends vary significantly. For example, frequency within the drug channel accelerated sharply within the last year, increasing by 6.7%. This growth is being driven by a number of factors, including shifting trip mission trends.

Quick trips, small “need-it-now” excursions with an average basket size of less than $40, have become more common as consumers look to minimize large one-time outlays of cash, McIndoe reported. With a broad assortment of health-and-wellness solutions and a growing assortment of food and beverage offerings, close-to-home drug stores are a logical destination for shoppers looking to quickly pick up needed items with only minimal gas and time investment. Dollar stores also are benefitting from this trend due to generally convenient locations and broader, expanded assortments. These efforts clearly are paying off, with dollar channel frequency increasing by 2.6% during the past year, McIndoe added.

“When thinking about channel migration trends, CPG and retail leaders must consider changes in the channels themselves and how those changes will impact shoppers,” said Susan Viamari, Times & Trends editor at SymphonyIRI. “For instance, as ‘big box’ retailers open smaller-format stores, such as Target opening CityTarget, closer to downtowns, will shoppers continue driving to traditional value formats that tend to be located in more out-of-the-way locations?”

According to SymphonyIRI, CPG manufacturers and retailers seeking to capture new growth opportunities and minimize risks associated with channel and consumption migration trends should consider the following action items:

  • Identify new growth opportunities and risks through ongoing category and brand channel migration tracking: Manufacturers should closely monitor the evolving competitive set at the channel and retailer level to understand channel share shifts across key categories and brands, including competitor brands, as well as existing and emerging product distribution strategies. Retailers should invest to understand core consumer segments while closely monitoring high-potential targets and their evolving channel, banner and brand selection processes;

  • Align distribution, marketing and merchandising strategies with channel migration patterns: Manufacturers should isolate their most important shoppers and ensure distribution strategies cater to their preferred trip types, channel preferences and store locations. Retailers should cross reference their key shoppers against key consumer segments across key manufacturer partners to find common ground for co-marketing programs; and

  • Protect and grow share among top shoppers: Manufacturers should drive satisfaction, trip and basket size with specially-targeted promotional programs that entice and reward top shopper segments. Retailers need to maintain a deep understanding of emerging shopper patterns and competitive threats among key shopper and target segments.

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