Medicines 58% Growth Over 10 Years Driven by New Product Development, bad weather and smoking bans. Beauty products growth driven by new products and promotions
LONDON – 14 FEBRUARY – IRI, the world’s leading provider of consumer, shopper, and retail market information, today revealed exclusive figures from their annual ‘Healthcare and Toiletries Review 2007’, which demonstrates a 58 percent growth over 10 years, in retail sales of over-the-counter medicine products, within the United Kingdom. The research from IRI addresses products purchased by consumers in retail supermarkets and chemists without the need for prescriptions.
The sales increase in 2007, which represents the biggest volume growth this century, was driven by a number of factors. The short summer period in the UK, last year, led to massive increases in cold and flu sales while lowering those of hayfever remedies.
Martin Wood, Client Solutions Director at IRI explained:
“Over the counter products have seen a massive boost in sales due to underlying factors such as changes in our weather patterns. As retailers make medications more accessible to consumers we find that they are more likely to medicate themselves rather than go to their GP, therefore increasing sales of those products. From a smoking point of view there is no doubt that the imposed smoking ban has increased sales of products aimed to help people quit. Legislation to ban smoking in public places contributed to unit sales of smoking cessation products, which, according to IRI’s research grew 17% from 8M packs in 2006 to 9.4M in 2007.”
Effect of price and promotions on Brands in toiletries
IRI’s study looks not only at unit sales, volumes and promotions but also at brands. Within this scope the company has identified a pattern in sales of ‘own label’ products diminishing due to a fall in prices of the UK’s popular toiletry brands. To demonstrate this, a five year grocery basket comparison of same products (SKU, same stock-keeping-unit) shows that prices have dropped across products and would save the consumer £8.45 on that same basket.
Wood continued, “Most consumers would find it difficult to believe that the same products would cost less today than five years ago. The reality is that those consumers are buying different products today than they were then and as a result don’t benefit as much as they could from falling prices. Through our analysis we can determine that average UK consumers are attracted more to brand names but at the same time their choice will rely on which products are on promotion by the retailer.
The Importance of New Products
To counter the dropping prices in established products, new, higher priced products become increasingly important. IRI’s study found in 2007 alone new toiletry brands contributed to 140m in UK sales.
DaVinci, IRI’s launch management tool is specifically designed to monitor new-product development (NPD). DaVinci enables manufacturers to determine the success of a new product introduced into the market.
Tim Eales, Industry Insight Director at IRI concluded that, “Over the past ten years, consumers will have witnessed more new product launches than ever before. This strategy is critical to the stability of the market based largely on the structuring of prices. Product valuation is being determined and typically forced down by the retail community which consequently deteriorates the manufacturers’ business value. For this reason, launch models like DaVinci, can be so important in quickly determining success or failure within NPD.”
Further details from ‘Healthcare and Toiletries Review 2007’ is available to interested journalists upon request.
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About IRI
IRI is the world’s leading provider of consumer, shopper, and retail market information, insights and decision solutions to 95 percent of the FORTUNE Global 500 consumer packaged goods (CPG), healthcare and retail companies. Only IRI offers the unique combination of integrated market and shopper information, automated analytics and predictive insights, innovative technology, and domain expertise. With IRI, leading manufacturers and retailers are able to drive their growth by quickly discovering breakthrough insights, making smarter decisions, taking faster actions across the enterprise, and achieving breakthrough results. Companies around the world depend on IRI for technology and solutions that enable brand building, successful new product launches, consumer-driven merchandising/retail execution and consumer and shopper relationship management. For more information, visit www.infores.co.uk
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