Recessionary Winners and Losers

During the week, Todd Hale, senior vice president of consumer and shopper insights at The Nielsen Co., hosted a presentation on CPG Trends. Hale spoke specifically on what it takes to win in the “Great Recession” of 2007, 2008 and 2009.

He stressed the value retailers are where it is at these days. To hammer that home, he talked about the growth in store counts of warehouse clubs, supercenters and dollar stores. He also noted strong growth for Kohl’s, Walgreens and CVS Pharmacy and dollar stores, such as Family Dollar Stores Inc., Dollar Tree and Dollar General Corp.

Hale was quick to point out it isn’t only value that places these retailers in the winning category. “It is their constant re-investment in their businesses that is helping them grow even as consumers’ discretionary dollars tighten. You have to spend money to make money,” he explained.

A few other growth tenets offered included the concept that low prices only attract more low prices. While retailers might think price is king, his research reveals it only keeps chains on the promotional treadmill. “While these tactics might benefit consumers, it is retailers and manufacturers hurt in the long run,” Hale said. This is because once a retailer slashes prices, the competition does it too. Hale also suggested retailers look beyond freestanding coupons, instead directing consumers to Web sites where they can get personalized promotions, which result in greater redemption rates.

Private label has a 21 percent share of the business, Hale said, and although it won’t hit the 40 percent share of European markets, private label needs to be watched. For national brands, he suggested aggressive efforts to defend the worthiness of brands.

He also recommended retailers and manufacturers look for solution selling opportunities. Although he used a food example of at-home dining, there are ideas that can be used in beauty.

For example, spa at home opportunities or even drugstore makeovers on a budget. It is possible to squeeze more sales out of stores even in this market condition. Walgreens, for example, just reported same-store sales gains of 5.3 percent. Front-end, in particular, grew 2 percent. As Walgreens continues to roll out its new look, expectations are front-end will continue to expand.

People, Places and Things

A few words with Yannick Raynaud, general manager of La Roche-Posay. La Roche-Posay is currently offered in CVS and Duane Reade, as well as in derm offices.

WWDBeautyNews: How is business, especially in this economy?

Yannick Raynaud: Our performance is out pacing the industry. We have a great heritage, great word of mouth and great research behind the brand.

WWDBeautyNews: Any new items?

Y.R.: One new item is our Mela-D Serun Anti-Ark Spot Concentrate, the first serum from La Roche-Posay clinically proven to correct dark spots and help even out skin tone. We also have La Roche-Posay Effaclar AI Intensive Acne Spot Treatment, which will reduce acne in three days.

What’s In Store

Walgreens 7,000th store: Last week CVS hit that milestone; this week Walgreens did it with new units in Brooklyn. The two continue to battle for bragging rights for largest chain.

L’Oréal’s New Headquarters:
This week, L’Oréal opened its second corporate office, this time in Berkeley Heights, N.J., which houses 400 employees.

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