Sales of OTC products outside pharmacies in Poland: the category of sales channel is the most important factor

Between June 2009 and May 2010 non-pharmacy sales channels sold almost 136 million packets of OTC products for more than PLN 502m (€123m), according to Nielsen data. The breakdown of sales of such products by volume and by value is similar. The most substantial share as a proportion of sales is that of analgesics in the form of tablets – 80% in terms of volume and 70% in terms of value. It is worthy of note that in comparison with the period June 2008-May 2009, the share of painkillers as a proportion of non-pharmacy sales declined by 1.5 p.p. by volume and by 1.6 p.p. by value. Painkillers sales declined by 1.7% by volume but increased by 4.6% by value.

The second largest category of non-pharmacy sales is that of vitamin products and synthetic sweeteners – a share of around 12% by value and 11% by volume, which represents a year-on-year increase of share of 1.8 p.p. by volume and 0.8 p.p. by value. Sales of vitamin products increased by close to 20% by volume and by 14.5% by value.

During the period in question, throat lozenges accounted for around 13% by value and 7% by volume. Sales of such products declined by 0.3% by volume but increased by over 16% in value terms. In terms of both value and volume there was a 0.2 p.p. year-on-year reduction in the share of lozenges in non-pharmacy sales.

 

 

 

The number of OTC products in the offer differs from one kind of shop to the next. Whereas hypermarkets and supermarkets offer a wide range of OTC products (displayed in most cases on specially created “health shelves”), smaller shops, kiosks and shops located at petrol stations usually concentrate on only the most popular items.

A store check by PMR carried out in 2009 revealed that the number of OTC products sold at hypermarkets ranges between 80 and 200. On average, a standard hypermarket in Poland carries a range of 120[1] products[2] bearing the status of a drug, dietary supplement or herb. products bearing the status of a drug, dietary supplement or herb.

Nielsen data show that the most substantial share (by value) as a proportion of the sales of OTC products in hypermarkets is that of vitamin products and synthetic sweeteners (43% between June 2009 and May 2010, whereas as a proportion of total OTC they accounted for only 12%). Painkillers accounted for 41% of sales during the period in question.

 

The breakdown of sales of OTC products is significantly different in the case of small-format grocery stores (taking up less than 40 m²). In such stores painkillers constitute the largest group of OTC products by value, with a share of 78% as a proportion of total OTC sales (as a proportion of overall non-pharmacy sales of OTC products, painkillers account for around 70%). Interestingly, with regard to kiosks the share of painkillers is even more substantial – around 90%.

In contrast to hypermarkets, in small-format stores vitamin products and synthetic sweeteners are not prominent in sales. Between June 2009 and May 2010 they had a share of only 4% as a proportion of total OTC sales (largely because stores of this kind do not have a wide range of vitamins).

 

The non-pharmacy drug market is similar, in its basic characteristics, to an FMCG[3] market, with very frequent purchases, small amounts of drugs bought at any one time and relatively cheap single purchases. As it does on the overall FMCG market, advertising also plays a significant role in the case of OTC products, particularly given the fact that the patient (customer) exercises freedom of choice in his/her purchase of drugs (unrestrained by the limitations of a prescription, but influenced by other factors, such as a relative’s opinion or an advertisement on TV or in a newspaper). These principles are well understood by the manufacturers of OTC products, who spent PLN 1.13bn (€258m) on product advertising (a year-on-year increase of 23%) between Q1 and Q3 2009[4]. With the exception of the retail industry, only the pharmaceutical industry in Poland increased its advertisement spending in 2009, according to estimates by Starlink.

OTC products are not only promoted on TV and radio, but also in retailers’ promotional magazines, and this directly affects non-pharmacy sales. In 2009 OTC products were promoted in retail magazines almost 2,300 times, an increase of 23% in comparison with 2008[5]. Stores of all formats, with the exception of cash&carry establishments, have increased the number of OTC product promotions. Hypermarkets and wholesalers increased the number of promotions by 77-78%. The most substantial increase in the number of OTC product promotions was carried out by discount stores (113%), but this was still insignificant in comparison with other shop formats.

 

 

Promotions of tonics accounted for almost half of all OTC product promotions (1,015) in Poland in 2009. Dietary supplements and stimulants were promoted more than 500 times, and ointments, gels and balsams – 250 times.

 

 

Agnieszka Stawarska

Pharmaceutical Market Analyst

PMR Publications