Ethnic sales are stable despite moderate growth - ethnic health and beauty aids - Ethnic HBA: Overview

Ethnic, at the midway point of 1991, is generating single-digit sales growth at drug chains in most parts of the country. Buyers cite gains that range from flat to 5 percent--with some reporting high-volume ethnic stores up as much as 30 percent.

In California and parts of the Midwest, business is "sound and stable, but growth is flat to moderate," said Chuck Lewman, president of Paul's Sundries, Los Angeles.

At Eckerd, growth has stabilized after two solid growth years, a spokesperson said. The chain attributes the slowdown to the lack of exciting product launches. Growth may be rejuvenated, Eckerd execs said, by innovative products expected from Luster, launches in ethnic cosmetics and children's toiletries.

Double double digit

"We're doing very well with the category in ethnic neighborhood stores," Jim Harrison, Jr., president of Harco Drug, told Drug Store News. "We're getting double digit growth . . . by giving the category its due in the right neighborhood stores."

In New Orleans, both Jane Besthoff, who buys ethnic hair care for K&B, and Donna McManus, who buys ethnic cosmetics, report strong category growth. Besthoff cites merchandising changes as the big plus: "In the last year-and-a-half, we've gotten a better mix of product and our strengthened co-op advertising."

Mike O'Brien, who buys ethnic HBA for the Atlanta division of Harris Beauty Supply, based in Alexandria, Va., reported that 1990 category sales in its regions rose 8 percent to 10 percent, with much of the growth being driven by chains like Harco, Peoples, Kmart, WalMart, Drug Emporium K&B, Big B and Eckerd, all of whom are dedicated to this business.

Dan Medow, president of Standard Distributing, Detroit, also reports that business is growing "across all trade classes. At least one of our vendors is up 18 percent for the year."

Nielsen Marketing Research reports that for 1990, total ethnic hair care product sales through mass market outlets were down 0.5 percent, but the sharpest decline--12.6 percent--was registered in food stores.

Mass merchandisers, led by Kmart and Wal-Mart who are committed to the category, posted a 10.4 percent increase in ethnic. Drug chains, which account for 91 percent of all drug store ethnic hair care volume, rose 3 percent overall, Nielsen said.

"Sales are up in the ethnic hair care category," said AHBAI executive director Geri Duncan Jones. "The relaxer category is doing well. Styling aids are doing well. The growth overall is moderate, but it is up."

More imagination

Jones thinks that mass retailers, particularly drug chains, could grow more by following the examples of dedicated chains like Perry and Walgreens, and taking a more imaginative, less restrictive approach to merchandising the category.

"The new baby lines coming out, for example, definitely have a place in the market. But some of the drug chains have such tight restrictions on space, they haven't moved fast enough to bring them in yet," she said.

Towne-Oller, which tracks ethnic and general market HBA sales through several trade classes--including drug chains and beauty and barber supply stores--reports that 17 percent of all the new items introduced in the ethnic market during the past five years are now in the Top 200 best-seller rankings. In comparison, only 7 percent of new HBA items introduced in the general market are in the Top 200.

To drive home the point, Towne-Oller also reports that new items launched within the past five years now account for 24 percent of all ethnic HBA sales.

What's new

Jones points out that ethnic consumers thrive on new items and are prone to look for stores that stock what's new: "The B&B stores, especially, are open to anything new. If they have it and no one else has it, they get the business.

"Many drug chains will wait a year or so before they put in new items like this," she adds. "By the time they do, consumers have gotten used to buying them somewhere else."

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