When you need medicine for a cough or aspirin for a headache, it’s good to know your local convenience store has you covered. “The shopping occasion is usually for an immediate need, but retailers can also merchandise the category for impulse buys as well,” said Jayme Gough, analyst for NACS.

While usually a small part of a c-store, health and beauty care (HBC) is a lucrative category with high sales margins for retailers that stock it to meet the needs of shoppers, according to retailers. “It’s not a big sale, but every little bit helps,” said Hamid Suhil, manager for the Betty Beaver’s Truckstop in Canajoharie, New York.

At the two locations of Country Corner in Idaho Falls, Idaho, the health and beauty care category has had steady sales over the past year. “It’s busy enough that we order once a week to replenish our HBC stock,” said co-owner Allison Delarosa.

Industry Sales

Source: NACS State of the Industry Report of 2017 Data

Overall, health and beauty care’s percentage of in-store sales stayed flat from 2016 to 2017, according to NACS State of the Industry of 2017 Data, but this amount was still robust enough to keep HBC in the number nine slot of the top 10 in-store category sales, excluding cigarettes. HBC nudged up a smidgen (moving from 1.27% to 1.28%) of in-store sales, but registered a respectable 2.5% jump in average sales per store, while the number of stores carrying health and beauty care products remained steady.

“HBC is typically a small footprint within a store, but during the cold and flu season, this category can bring in customers looking for relief,” Gough said. “It’s critical that retailers make it easy for customers to find the cold medication and over-the-counter flu medicines to grab those sales.”

Energize Me

As in recent years, energy shots provided the brightest spot within the HBC category, contributing 25.6% to the overall category sales. Within the energy shot subsection, convenience store sales for 5-Hour Energy have remained stable compared to last year.

HBC meets an immediate customer need while being a solid contributor to a retailer’s profits.

“Consumers still think of convenience stores as their go-to energy shot retailer due to the speed-to-market of new items and trends,” said Melissa Skabich with 5-Hour Energy. “When placed on the retailer’s counter, it is a high-impulse, high-margin and high-turn item.”

Convenience stores report varied sales when it comes to energy shots. At Betty Beaver’s Truckstop, energy shots sell better in the summertime than during the colder months, but overall, sales have been stagnant. “It’s a very small part of our overall sales,” Suhil said.

However, energy shots move briskly at Country Corner. “We sell a ton of them,” Delarosa said. She stocks energy shots in two places to catch customer attention—next to the granola bars and in the candy aisle.

The variety of flavors has kept interest high in energy shots at Country Corner. “With more depth to the lines, customers can find a flavor that they like or they can try different kinds,” Delarosa said.

The Right Mix

HBC is one category that especially benefits from retailers’ thoughtful reviews of the SKUs to ensure they are offering a varied product mix. “Retailers need to pay attention to the seven core categories that represent 80% of HBC and to ensure that the products within those core categories have the nationally recognized brand names customers both want and trust,” said Tom LaManna, vice president of merchandising sales for Convenience Valet. “Our research shows that most consumers prefer and look for national brands for medications especially.”

At Betty Beaver’s Truckstop, Suhil mostly stocks smaller, name-brand packages, such as single- and two-dose tablets, in cold and flu medications. “During the cold weather, people are always looking for something in HBC,” he said.

Suppliers such as Lil’ Drug Store Products assist retailers in ensuring that the small footprint packs the right punch in terms of products. “We want to help retailers make their HBC space as productive as possible,” said Doug Marquardt, director of marketing for Lil’ Drug Store. “When people shop a c-store’s HBC section, they’re looking to solve an immediate need, so having the products that meet that need is paramount.”

Source: CSX; csxllc.com

Many stores such as Country Corner put the health and beauty care products in aisles near the register to increase visibility. “Our research finds that when HBC is near the checkout, sales increase dramatically,” Marquardt said. “People will buy HBC products when they know the store has them.”

Impulse Purchases

While much of health and beauty care sales come from filling a short-term need, consumers also will make unplanned purchases of category items when they’re more visible. Gough recommended positioning products such as lip balm or cold tabs next to the cash register. “Customers are already coming for something else, so reminding them you can meet their HBC needs can translate into those impulse sales,” she said.

That’s what Country Corner does with countertop lip balms and cold remedy displays. “We see an uptick in sales on those products when we put them by the register,” Delarosa said.

Convenience Valet provides countertop and freestanding placement displays for allergy season and cold and flu season. “Having a secondary display or clip strip with target medications during each season can generate additional sales and complements a store’s existing planogram,” LaManna pointed out.

Subcategory Performance

Source: NACS State of the Industry Report of 2017 Data

We stock HBC because our customers expect we’ll have what they need when they need it.

Providing additional incentives can push more sales too. “We also suggest that retailers take advantage of manufacturer offers of buy-one, get-one-free, especially for items like lip balms,” Marquardt said. “That can help maximize incremental sales for categories like lip balm during the winter months when consumers need those products.”

When retailers position more impulsive HBC items, such as lip or skin care, next to cold medications or over-the-counter flu remedies, they can increase the basket size. “Using strategic placements within the category itself can also turn a target shopping occasion into impulse buys,” said Gough.

A Healthy Future

The health and beauty care category should continue to be a valuable part of a c-store’s mix because it meets an immediate customer need while being a solid contributor to a retailer’s profits. “Health and beauty care still delivers terrific margins for retailers,” LaManna said. “From a profitability standpoint, when the category’s done right, customers will pick up ancillary items, thus increasing overall profitability.”

Being the convenient answer to a problem gives customers another reason to stop by your store. “Because of our location in a more rural area, we stock HBC because our customers expect we’ll have what they need when they need it,” Delarosa said. “We still think health and beauty care is a viable category for our stores.”

“This is a money-making category that can bring a good return on investment when retailers take the time to make sure customers can easily find the medicines they’re seeking cold and flu season,” Gough said.

As Marquardt pointed out, “When a convenience store can help someone feel better by offering a remedy, that can get the consumer to think about going there for other things as well.”