Out-of-Sight Pretty Much Means Out-of-Stock on Grocer's Cold Meds
By George Anderson
According to research by Information Resources, Inc. (IRI) performed in Oklahoma and Illinois, laws in those states that require retailers keep products containing pseudoephedrine (PSE) behind the counter has affected the sale of allergy and cold medicines to varying degrees.
In Oklahoma, pills containing PSE experienced a decline in sales volume of 16 percent after moving behind the counter. Because space is limited, IRI said the number of items available for sale to consumers was reduced by more than a third.
Sales of alternative products that do not contain PSE benefited from the restricted access to medicines containing PSE. According to IRI, non-PSE product sales increased 24 percent in food, drug and mass (excl. Wal-Mart) in Oklahoma over the same period. Consumers, evidently, would prefer to find an easy alternative on the shelf than wait to be served at the pharmacy.
IRI's research also found that not all sales channels were hit equally hard by the ban in Oklahoma. According to a company press release, "PSE product sales actually increased significantly in drug stores in the weeks following legislation, but suffered major declines in grocery stores, where item reduction was more dramatic and opportunity was more limited due to the number of stores without pharmacies. The net result has been a shifting in volume share of PSE products from grocery stores to drug stores. This is bad news for grocery stores, which are likely missing out on the sale of other products, as well, when consumers go to drug stores instead for their allergy/cough/cold products."
The law passed in Oklahoma banned all pills containing PSE as an ingredient but the legislation passed in Illinois was less restrictive with the behind-the-counter designation applying to single-ingredient PSE products only.
In Illinois, items with and without PSE are both trending upward.
Robert Doyle, senior vice president of IRI's Healthcare Solutions Group, said in a released statement, "The allergy/cough/cold category is in a state of flux. Both manufacturers and retailers are struggling to accurately assess demand for both PSE and non-PSE alternatives and need to quickly implement strong consumer marketing and communication programs to ensure that they protect and grow share within this incredibly valuable consumer segment."
Moderator's Comment: What is your take on IRI's research into the sale of cough, cold and allergy medicines in Oklahoma and Illinois? What can retailers and manufacturers do to keep sales strong in light of the legal and, in some cases, voluntary restrictions being placed on items containing PSE?
Robert Doyle called greater collaboration between manufacturers and retailers an "imperative" in light of the challenges posed by the current situation. - George Anderson - Moderator