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Insights

Winning in Winter: Cold Weather Fuels Pharmacy Sales

By Leandra Wiid, Associate Director - Retail Industry Group, Nielsen
FMCG and Retail | 20-11-2014
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Sales of over-the-counter (OTC) pharmacy products is now a $5 billion industry in Australia – growing at a healthy five percent over the past 12 months. The latest quarter, which included the winter season, delivered even stronger growth, up 9.5 percent compared to a year ago. Notable sales increases for the three largest OTC categories are responsible for fuelling positive market performance: vitamins and supplements increased by 15 percent, cough, cold and flu sales were also up by 15 percent, followed by cosmetic skin care up 12 percent.

Vitamins and supplements is the top value driver for pharmacy OTC representing almost one in every five dollars spent. The category has continued to gain even more traction over the past quarter driven by some of the smaller segments such as magnesium, while krill oil bucked the trend with slight value declines off-the-back of a huge growth spike in the previous year.

The most important consumer group for OTC pharmacy is, not surprisingly, the older generation with over 55 percent of senior couples purchasing health care products over the past year. This is followed by independent singles (52%) and established couples (49%). The gap lies within the family segment with only 39 percent of bustling families and 38 percent of small families shopping for health care needs in pharmacy in the past 12 months.

Almost one in two (48%) Australian households purchase health products in pharmacy, down marginally (-1.2 percentage points) compared to the previous year; and they are spending just under $30 per shopping trip.

Over the coming three to five years, the focus of the entire pharmacy industry will need to shift toward the increasingly ‘elusive’ shopper in order to deliver profitable growth. It is likely that the momentum challenge that the supermarket sector is currently experiencing will accelerate its targeting of the pharmacy channel in its search for new growth opportunities. In many respects this is already starting to play out in the new store designs of our supermarket retailers. 

Now, more than ever, the ability to segment, target and delight an increasingly fragmented shopper base will become a hygiene factor in order just to compete. Taking the first step toward a shopper-centric approach is relatively easy, but like any strategy the key is implementation and adjusting tactics as market conditions change. 

Tagged:  WOMEN  |  BRAND MARKETING  |  INNOVATION  |  SHOPPER  |  CONSUMER  |  CPG AND RETAIL  |  HEALTH CARE  |  GROCERY
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