How to Grow GM & HBC Sales in the Grocery Store

By: Peter Collins, Director of Industry Relations and Development, Food Marketing Institute

Across the store, grocery channel sales are predicted to grow only one percent per year. This means grocery stores need to look at multiple ways to differentiate themselves to attract more customers. While the supermarket is traditionally known for the wide variety of food offerings available, new research suggests an opportunity for grocery stores to increase sales in General Merchandise (GM) and Health and Beauty Care (HBC) for overall sales increase.

FMI recently commissioned a study conducted by Acosta Strategic Advisors on identify winning growth strategies for GM & HBC in the grocery channel. Initial findings from the research were released during FMI Connect this week and include easy-to-implement tactics for increasing GM & HBC sales in grocery stores.

Overall, the research finds shoppers are willing to buy more GM & HBC products in grocery stores citing convenience as the main reason. At the same time, GM & HBC products represent a value add for food retailers with baskets representing $88 for GM products and $82 for HBC products, both of which represent higher baskets sales than meat, produce, dairy and dry grocery baskets. However, the research suggests shopper perceptions and the food-centric nature of grocery stores are both hindering potential growth.

With this in mind, here are some of the strategic ways food retailers can enhance their GM & HBC offerings in grocery stores:

• Make HBC A Destination – Bring traffic to the product by enhancing visibility of promotions, shelf display, signage and even leveraging the pharmacy destination.
• Weave GM Products Throughout The Store – Pairing GM products that enhance food products is one way to integrate GM products throughout the store. Taking advantage of trends like holidays and seasons is another way to showcase GM product availability.
• Counter the Online Threat – Create more in-store browsing opportunities for GM & HBC products and leverage the departments in your grocery stores that shoppers depend on like the pharmacy and fresh prepared.

The initial findings released during FMI Connect are part of a larger ongoing education campaign by FMI and Acosta Strategic Advisors on GM & HCB that will include a white paper/playbook, webinar and ongoing research. Click here for the session slides.