NEW YORK — As a record number of attendees descend on Palm Beach, Fla., for the annual meeting of the National Association of Chain Drug Stores, profitability will be a key word.
More than 2,400 retailers, manufacturers and their spouses are scheduled to gather April 23-27, and this year’s theme is “The New Agenda: Today, Tomorrow & Beyond.” But while the major discourse will deal with pharmaceutical issues having a future impact on the chain drug business, executives admit change is needed in the beauty industry.
“We’re working very diligently on improving cosmetics productivity,” said Gerald Heller, president and chief executive officer of May’s Drug, Tulsa, Okla.
The factors contributing to the increased focus on profitability in cosmetics are increased competition, vendor reductions in large-buy discounts and better data available to management for analysis of sales.
“We’ve definitely gotten tougher with our editing,” said Naomi Germano, cosmetics buyer for Harmon Drugs in Cedar Grove, N.J. “The economy has been tough. Our space hasn’t changed, so we’ve altered the product assortments to meet the most important trends.
“Turns in profit are our most important concern,” she continued. “The cosmetics counter is not simply there to lure a woman into the store. It has to offer what she wants to buy.”
At King’s, a 31-year-old drugstore in the Dunwoody area of Atlanta, president Steve Sharp said he’s also been doing a lot of editing.
He is phasing out unprofitable lines such as L’Oreal and increasing the profitable ones. Ultima II and Elizabeth Arden are King’s best-selling lines, and Sharp said he is increasing the product mix of both.
The commitment to stricter cosmetics editing at PayLess stores involves “taking a hard and serious look at the mix and the selection in the store, looking to see if we really need to carry every single sku, and being on top of the hot items as quickly as possible,” according to cosmetics and fragrance buyer Sheri Ralston.
“We’re beginning to react to what our new [information] systems are telling us, which is that we’ve got to get the category in line from a profitable standpoint,” she added.
Change is also taking the form of a departure from the NACDS. Thrift Drug president Robert Hannan passes the NACDS chairman’s gavel to Jack Futterman, chairman, president and ceo of Pathmark Supermarkets, Woodbridge, N.J.
Futterman is the first head of a nontraditional chain drugstore to assume the role of chairman of NACDS.
Convention attendees will also ponder strategies by which the mass market can continue to lure away department store beauty consumers.
To address this question, WWD asked women where they shop for cosmetics — and why. The answers are compiled in On The Street.