The multiples have done very well out of RPM abolition and the OFT could do them further favours says Ailsa Colquhoun
The grocery sector accounts for £378m of the total £1.16bn up for grabs in over the counter medicines [Taylor Nelson Sofres], but factors are about to come into play that could add millions to the grocers' figure.
The Office of Fair Trading is conducting an inquiry into rules that limit which outlets can dispense prescriptions. The OFT is expected to report its findings at the end of this month and, while it remains tightlipped about how the inquiry is going, it is hotly tipped to recommend some form of relaxation in out of town locations.
The result will be to make coveted NHS dispensing contracts easier and cheaper to obtain, opening up the estimated £18.7bn prescription market in the process. As six million Britons are said to visit a pharmacy every day, primarily for a prescription, the move is certain to boost the potential market for OTC medicines.
Asda, still the number six player in healthcare, is poised to pursue any new pharmacy opportunities. Business unit director David Miles says that the current contract allocation system has effectively prevented it from pursuing plans to open drive-through pharmacies in the UK and achieving its ultimate aim of a pharmacy in every store.
Tesco, which already has more pharmacies than any other supermarket chain, is also pledging to open pharmacies where it can.
Londis, too, reckons that any relaxation will benefit its Londis Unichem opening programme. National sales planning controller Paul Courtney says that, as it stands, the plan is to open about 30 such stores over the next five years, adding to the three already open. The initiative has proved lucrative all round, with grocery turnover in the first store up 30% and pharmacy sales up 10%.
But, even excluding prescription (POM) and pharmacy (P) medicines from the equation, grocers look set to cash in on a massive opportunity from OTC.
Since May last year when resale price maintenance on medicines was abandoned, pharmacies have struggled to maintain the premise that OTC medicines are not ordinary items of commerce. With three-for-two offers running across the grocery sector on favourites such as Nurofen, consumers have voted with their feet, denting pharmacy's share of the total OTC market by 4%, bringing it to 46.7%. Independent pharmacies have been badly hit, although even Boots, the largest healthcare retailer with a 28% share of the market, saw its share sliced by 2%.
Multiple grocers, on the other hand, have done well out of RPM's abolition. Tesco's volume share of the OTC market increased 2% to 15.8%, and its sales value rose 14%.
This is a worthy achievement in the light of an extra 550,000 consumers entering the market in the past year, buoyed by cheaper prices. Overall, the market is down 1.7% in value and up 1.6% in volume, as their shopping spend dropped 7% to £24.92. Moreover, heavy price promoting has wiped nearly 5% and 3.3% respectively off the sales values of the two largest OTC markets, vitamins, minerals and supplements and painkillers, which together make up half of the market.
One reason for grocery's immunity to the havoc of RPM's abolition could stem from what pharmacists believe is a "torrent" of pharmacy to general sale list (GSL) medicine reclassifications. While some significant POM-P reclassifications are on the cards, products have been moving P-GSL at a greater rate than have gone from POM-P. News of the application to sell hydrocortisone cream as a GSL medicine for bites and stings has hit pharmacists so hard they are beginning to lose faith in the P category's viability. In a recent poll, 61% of readers of weekly magazine Chemist & Druggist said they felt the P category had a maximum of four years of life left.
Manufacturers' response in the wake of the loss of RPM has been to try to protect market value through product innovation. Convenience and fastest possible efficacy are a common theme, alongside adding value. Nurofen's new click-top mobile' packs, for example, are designed to cater for the 34% of people thought to take painkillers on the move, but sell for a recommended £2.49, a 34% premium on the recommended price of regular Nurofen packs of 12.
The convenience factor is also behind the launch this year of combined Day and Night Nurse packs. They have inspired a glut of no-need-for-water products. Pioneered by Nurofen Meltlets, the format has crossed into the cold and flu fixture and into own label, with the recent launch of Lemsip Cold+Flu Max Strength Direct and Boots' own label maximum strength Cold & Flu Relief direct dose sachets.
The cold and flu category suffered last year from a mild winter with a sales dip of 1% by value to £199m [Taylor Nelson Sofres]. However, npd and the forecast for a bad winter are set to boost the £63m grocery sales [Information Resources].
According to GSK, consumers are becoming increasingly comfortable with self-medicating in this area.While pharmacy remains the dominant player with a 53% share, grocery's share rose just under 1%, while pharmacy's fell 5.6%. The trend this year, reports GSK, manufacturer of the leading Beechams and Nurses ranges, is for all-in-one products with the fastest action possible. In the Beechams portfolio, this has resulted in the launch of Beechams All-in-One tablets.
For Reckitt Benckiser, this has resulted in its Max Strength sub-brand growing at four times the rate of the rest of the sector.
The emergence of this new complete' sector, primarily located in the GSL area, has been at the expense of all other cold and flu sectors, reports Information Resources.
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The grocery sector accounts for £378m of the total £1.16bn up for grabs in over the counter medicines [Taylor Nelson Sofres], but factors are about to come into play that could add millions to the grocers' figure.
The Office of Fair Trading is conducting an inquiry into rules that limit which outlets can dispense prescriptions. The OFT is expected to report its findings at the end of this month and, while it remains tightlipped about how the inquiry is going, it is hotly tipped to recommend some form of relaxation in out of town locations.
The result will be to make coveted NHS dispensing contracts easier and cheaper to obtain, opening up the estimated £18.7bn prescription market in the process. As six million Britons are said to visit a pharmacy every day, primarily for a prescription, the move is certain to boost the potential market for OTC medicines.
Asda, still the number six player in healthcare, is poised to pursue any new pharmacy opportunities. Business unit director David Miles says that the current contract allocation system has effectively prevented it from pursuing plans to open drive-through pharmacies in the UK and achieving its ultimate aim of a pharmacy in every store.
Tesco, which already has more pharmacies than any other supermarket chain, is also pledging to open pharmacies where it can.
Londis, too, reckons that any relaxation will benefit its Londis Unichem opening programme. National sales planning controller Paul Courtney says that, as it stands, the plan is to open about 30 such stores over the next five years, adding to the three already open. The initiative has proved lucrative all round, with grocery turnover in the first store up 30% and pharmacy sales up 10%.
But, even excluding prescription (POM) and pharmacy (P) medicines from the equation, grocers look set to cash in on a massive opportunity from OTC.
Since May last year when resale price maintenance on medicines was abandoned, pharmacies have struggled to maintain the premise that OTC medicines are not ordinary items of commerce. With three-for-two offers running across the grocery sector on favourites such as Nurofen, consumers have voted with their feet, denting pharmacy's share of the total OTC market by 4%, bringing it to 46.7%. Independent pharmacies have been badly hit, although even Boots, the largest healthcare retailer with a 28% share of the market, saw its share sliced by 2%.
Multiple grocers, on the other hand, have done well out of RPM's abolition. Tesco's volume share of the OTC market increased 2% to 15.8%, and its sales value rose 14%.
This is a worthy achievement in the light of an extra 550,000 consumers entering the market in the past year, buoyed by cheaper prices. Overall, the market is down 1.7% in value and up 1.6% in volume, as their shopping spend dropped 7% to £24.92. Moreover, heavy price promoting has wiped nearly 5% and 3.3% respectively off the sales values of the two largest OTC markets, vitamins, minerals and supplements and painkillers, which together make up half of the market.
One reason for grocery's immunity to the havoc of RPM's abolition could stem from what pharmacists believe is a "torrent" of pharmacy to general sale list (GSL) medicine reclassifications. While some significant POM-P reclassifications are on the cards, products have been moving P-GSL at a greater rate than have gone from POM-P. News of the application to sell hydrocortisone cream as a GSL medicine for bites and stings has hit pharmacists so hard they are beginning to lose faith in the P category's viability. In a recent poll, 61% of readers of weekly magazine Chemist & Druggist said they felt the P category had a maximum of four years of life left.
Manufacturers' response in the wake of the loss of RPM has been to try to protect market value through product innovation. Convenience and fastest possible efficacy are a common theme, alongside adding value. Nurofen's new click-top mobile' packs, for example, are designed to cater for the 34% of people thought to take painkillers on the move, but sell for a recommended £2.49, a 34% premium on the recommended price of regular Nurofen packs of 12.
The convenience factor is also behind the launch this year of combined Day and Night Nurse packs. They have inspired a glut of no-need-for-water products. Pioneered by Nurofen Meltlets, the format has crossed into the cold and flu fixture and into own label, with the recent launch of Lemsip Cold+Flu Max Strength Direct and Boots' own label maximum strength Cold & Flu Relief direct dose sachets.
The cold and flu category suffered last year from a mild winter with a sales dip of 1% by value to £199m [Taylor Nelson Sofres]. However, npd and the forecast for a bad winter are set to boost the £63m grocery sales [Information Resources].
According to GSK, consumers are becoming increasingly comfortable with self-medicating in this area.While pharmacy remains the dominant player with a 53% share, grocery's share rose just under 1%, while pharmacy's fell 5.6%. The trend this year, reports GSK, manufacturer of the leading Beechams and Nurses ranges, is for all-in-one products with the fastest action possible. In the Beechams portfolio, this has resulted in the launch of Beechams All-in-One tablets.
For Reckitt Benckiser, this has resulted in its Max Strength sub-brand growing at four times the rate of the rest of the sector.
The emergence of this new complete' sector, primarily located in the GSL area, has been at the expense of all other cold and flu sectors, reports Information Resources.
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