Forecourt Trader - 30 years at the heart of the fuel retailing community
A healthy profit
Published:  06 December, 2005

With the Met Office predicting a big freeze and cold and flu rates set to soar, over the counter medicines (OTC) will be vital this winter.

The distress nature of the category and continuing government policy that encourages self-medication means that forecourts are well placed to pick up their share of any extra trade. Consumers now expect to be able to treat common complaints themselves and the forecourt convenience store can provide quick, hassle-free access to a range of remedies and other healthcare essentials. Longer opening hours and easy parking make your store likely to be the first port of call if the chemist is shut – after all, who wants to waste time queuing in a supermarket for a packet of painkillers? And since healthcare is usually a distress purchase, these products are less price sensitive.

According to Crookes Healthcare, manufacturer of Nurofen and Strepsils, the OTC market is worth £2bn and growing, making it a ‘golden opportunity’ for retailers. Healthcare within the convenience sector is already worth £252m – up 3% on the previous year – and the profit margins on many products are very favourable.

Big brand names should form a major part of the forecourt healthcare fixture – people expect to see them and they act as a signpost to the section. Katherine Brown, marketing director for Wyeth Consumer Healthcare, makers of Anadin, explains: “Brands are even more important for OTC medicines in the convenience sector, more so than in multiple grocers. In the convenience sector, OTC medicines are often a distress purchase because consumers need to use them there and then and so they are looking for a brand they know they can trust. In the analgesics sector the top five SKUs deliver 57% of sales and they are all leading brands. Importantly for the retailer, brands deliver far greater profits than own-label equivalents.”

However, Brown believes that consumers also like to have a choice of products rather than just the single leading brand in a particular category. “In analgesics, for example, shoppers expect not only to have a choice of brands but also to choose from the different active ingredients on offer – aspirin, ibuprofen, paracetamol or a combination product,” she adds.

Convenience retailers should therefore try and stock at least a basic range with all key ingredients offered. Brown suggests Anadin Extra 16s (a combination product) and Nurofen Original 16s (ibuprofen) and ideally a third product, such as Anadin Paracetamol.

The key healthcare categories for the convenience sector are pain relief, cold & flu, throatcare, and heartburn & indigestion. Children’s pain relief is also an important distress purchase, and Calpol Infant Suspension 100ml bottle has recently been granted a licence to switch from pharmacy only, to the general sales list. According to manufacturer Pfizer, the bottles are the most widely recognised line in the Calpol range – the top selling children’s medicine – and the preferred format for in-home use.

While a good core range should be available all year round, GlaxoSmithKline Consumer Healthcare (GSK) highlights the importance of seasonal products – hayfever and allergy for late spring and summer, with greater emphasis on cough, cold and sore throat products in the winter months. Smoking cessation products, such as Niquitin CQ, are also worth stocking, especially for January, when New Year resolutions kick in.

Over-indulgence is another category requiring extra attention around this time of year. Sales peak over the festive season, according to GSK’s ‘Stomach, Heartburn & Indigestion Category Report 2005’, and on Christmas Day the local petrol station is often the only shop open.

GSK’s report says that over-indulgence products tend to be a ‘grab and go purchase’ and can benefit from dual siting next to Christmas stock. Product development in the category taps into this ‘grab and go’ shopper mentality. Gaviscon Cool tablets, made by Reckitt Benckiser, are now available in modern-style handy packs, which come in shelf-ready packaging. Bisodol, made by Forest Laboratories, is now available in a 20s pocket pack, said to have been designed specifically for the convenience sector, and again the product comes in a display pack to attract customers at point of purchase. GSK’s Andrews brand is also now available in an oval plastic pack.

As the country braces itself for the coldest winter for more than a decade, cold and flu will be the key category within healthcare. Indeed, a spokesperson from Reckitt Benckiser, makers of Lemsip, says the company expects to see an uplift in sales this winter as the number of people suffering from cold and flu symptoms is forecast to be higher than last year.

Lemsip is the number one brand in cold and flu, and Lemsip Max – which is celebrating its 10th birthday – is the top-selling product, according to IRI figures. This year the brand is backed by a £7m advertising campaign, with a new animated television advert featuring Lemsip packs coming to life to become a cold/flu superhero. The Lemsip Max hot drinks range has also been extended to include a new blackcurrant flavour.

GSK’s Beechams brand is number two in the cold and flu category, with Flu Plus its best-selling line. Easy-to-pour stick sachets have been introduced to the hot drinks range for this year, and Flu Plus and Beechams All-in-One will be the focus of a £5.4m support package, including TV advertising.

One of this year’s most interesting developments in the battle against colds and flu comes from Kimberly-Clark, which has launched Kleenex Anti-Viral tissues – said to kill the bugs that cause colds and flu. Claimed to be a UK first, the brand uses a patented super premium 3-ply tissue design, with a moisture-activated middle layer that is treated with a clinically proven anti-viral formula. The product is being backed by a £3m marketing campaign.

Toiletries

As part of their overall healthcare offering, forecourts also need to stock a good core range of toiletry products. Once again brands are essential, both in terms of popularity with consumers and to highlight the section.

Tracy Faulkner, trading manager for healthcare at Londis, stresses the importance of a range which focuses on quality products at reasonable prices. “Health and beauty products can be very profitable,” she says. “Margin will average between 25% to 30% and with products generally being over the £1 or £2 mark this can equate to a healthy cash profit. However, retailers need to remember to remain competitive and not over price products.”

In haircare, Pantene, Head & Shoulders, Dove and Alberto Balsam are key brands, says Faulkner, and shampoo should be merchandised next to the relevant conditioner to maximise sales. In deodorants Sure, Lynx, Right Guard and Soft & Gentle are top sellers, she says, with aerosol sprays the preferred format, although a small offering of roll-ons should also be available. In shaving, Gillette is the leading brand for both men and women. Femcare is a must-stock, and all formats should be covered – tampons, towels and liners. Always and Tampax are the leading brands.

Condoms are another key product for forecourts.

Durex is by far the biggest selling brand, with a share of more than 99% of the category in company-managed forecourts and 93% in independents, according to figures provided by manufacturer SSL Healthcare, and sales have increased over the last year. Durex Extra Safe and Fetherlite 3s are the best sellers in the convenience sector.




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Weekly retail fuel prices: 12 November 2018
RegionDieselLPGSuper ULUL
East137.08139.69129.73
East Midlands136.60139.38129.02
London137.0265.40139.68129.22
North East136.4569.90142.07128.06
North West136.60138.23128.71
Northern Ireland135.0969.90137.92128.64
Scotland137.07136.04128.45
South East137.4666.90139.94129.99
South West136.7567.90139.46129.38
Wales136.47135.40128.21
West Midlands136.02140.93128.76
Yorkshire & Humber135.86140.71128.57

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