Severe flu season results in out-of-stocks at retail

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This year’s flu season has been particularly severe, with the Centers for Disease Control and Prevention reporting the highest rate of flu-like illnesses since 2009. It also reported the highest flu-hospitalization rate since 2010, when it started keeping records.

Chris Elliott

Hospitalization rates have been that much higher because the principal strain, H3N2, causes more severe forms of flu and this year’s vaccine is not as effective as those of previous years. However, most people who contract the flu only suffer from mild symptoms that can be managed with over-the-counter remedies.

Q. When were retailers promoting cold and flu remedies the most?

A. Brand View has analyzed the promotion of O-T-C cold and flu remedies since October 1, 2017, at CVS Pharmacy, Target Corp., Walgreens and Walmart.

CVS had the greatest percentage of range on promotion throughout the entire period. Target promoted the least: In six of the 20 weeks analyzed it promoted no cold and flu remedies. This is not unusual for Target; while it promotes heavily in general merchandise, its promotional activity is typically limited in health and beauty.

Retailers’ promotions peaked in January and February. Target and Walgreens promoted the most in January, while promotions in CVS and Walmart peaked in February.

Q. Which brands were retailers focusing on?

A. Using Brand View Promotional History and Assortment, we can see which manufacturers each retailer focused on promoting on February 17, 2018.

CVS and Walgreens prioritized promotions on their private label ranges. Some 42.9% of CVS promotions were on private label products, although they only accounted for 30.7% of the total CVS range. Walgreens private label products made up 33.8% of its promotions, significantly more than their 18.7% share of the category shelf.

Walmart listed significantly more brands than the other retailers, almost double those of Walgreens and almost triple those of Target. As a result, 61.7% of its listings, and 66.7% of its promotions, are outside the top 10 most listed across the four ­retailers.

As previously seen, Target did not promote significantly in February. On February 17 it promoted seven items, all of which were Theraflu products.

Q. Has shopper demand hit retailers’ stocks?

A. Looking at the availability of cold and flu remedies, we can see that CVS, Walgreens and Walmart all had increases in out-of-stock products in January and February. On the week that commenced on December 24, 2017, some 10.1% of Walmart’s range was out of stock. Just two weeks later, this figure had more than tripled to 33.4%. For Walmart, however, the percentage of overstocks peaked at 37.3% in the week beginning October 15, 2017. CVS and Walgreens both had a noticeable increase in out-of-stock products from the start of February. The percentage of out-of-stock products in Target did not vary significantly; at its lowest it was 39.6% and at its highest, 43%.

Q. Which products are out of stock?

A. On the CVS website, 39.4% of the products displayed as out of stock were private label products, the highest percentage of the retailers ­analyzed.

Vicks had a significant proportion of out-of-stock products on all retailers’ websites; its biggest problem was on the Target website, where it accounted for 19.5% of all out-of-stock products — the greatest proportion of any brand in Target. Nature’s Way made up 17.6% of out-of-stock products on the Walgreens website; this was only three products out of the 17 total products that were out of stock.

Halls had the greatest proportion of out-of-stock products on the Walmart website, at 7.5%. The brand also had stocking issues on the Walgreens website, where it accounted for 5.9% of out-of-stock products.

The severity and extensive spread of flu-like illnesses this year has boosted sales of O-T-C cold and flu remedies. It is clear that retailers increased promotion of these products in January and February but not to an excessive extent.

The demand for these products, though, has clearly taken its toll on retailers’ supplies as the proportion of out-of-stock products has noticeably grown since the start of 2018 and appears to have had a noticeable impact on all four retailers. Major brands such as Halls, Mucinex and Vicks had noticeable stocking issues across most, if not all, of the retailers analyzed. This will undoubtedly cost each brand, and retailer, potential sales, as shoppers will have chosen a rival brand or gone to another retailer’s website to get the products they want.

Chris Elliott is senior insight analyst at Brand View.


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