Health Supplement Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,000 health supplement stores in the US sell vitamins, nutritional supplements, body enhancing supplements, and related products. Companies may also carry additional product categories associated with healthy lifestyles, including organic/natural foods and personal care products; diet and weight management supplements; and specialty pet foods. The industry includes national and regional chains, franchises, and independent operators. Large retailers often stock several thousand stock keeping units (SKUs) in each store, across multiple categories and brands.

Consumer Skepticism

The world of health supplements is fraught with conflicting information.

Fads And Trends

Driven by new product proliferation, the health supplement industry is subject to fads and trends, which can cause uneven demand and cash flow.

Industry size & Structure

The average health supplement store operates out of a single location, employs 9 workers, and generates $1.3 million annually.

    • The health supplement retailing industry consists of about 5,000 firms that operate 10,000 stores, employ 45,600 workers and generate about $6.6 billion annually.
    • The industry is fragmented at the bottom with some large players at the top; the top 50 companies account for about 51% of industry revenue.
    • Large companies include General Nutrition Centers (GNC), Vitamin Shoppe, and Vitamin World.
    • The industry includes national and regional chains, franchises, and independent operators.
                                  Industry Forecast
                                  Health Supplement Stores Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 13, 2022 - New COVID-19 Cases Increase, Reporting Decreases
                                  • Demand for supplements has risen during some prior COVID-19 case spikes and may do so again. New COVID-19 case rates increased in late April, with the seven-day rolling average increasing to roughly 85,630 on May 11, up from 72,300 on May 7, 58,000 on May 1 and 30,000 cases per day on April 8, according to a New York Times COVID-19 case tracker. Experts note that the American population has different vaccination rates, levels of previous exposure to the virus, and degrees of underlying health conditions, so the trajectory of new cases could vary. Analysts note that the data regarding new cases are getting less reliable as the public testing infrastructure continues to wind down and home test results are less likely to be reported to officials.
                                  • An Institute for Supply Management (ISM) barometer of business conditions at service-style companies such as retailers and restaurants decreased 1.2 points in April to 57.1% and signaled that labor and supply shortages as well as high inflation are hurting the economy. Results over 50% are viewed as positive for the economy and anything over 55% is considered exceptional. Experts say that demand is not the issue — businesses still have more than they can handle. Ongoing shortages of labor and supplies, high energy prices, and the worst bout of inflation in 40 years are the biggest hurdles. Service-oriented companies have generally fared worse during major viral outbreaks like the coronavirus pandemic according to the ISM. Their workers deal directly with customers and their businesses are more affected by government restrictions.
                                  • Cannabidiol (CBD) product manufacturers and marketers were among those most frequently cited by the US Food and Drug Administration for violations related to misrepresenting CBD products as COVID-19 treatments, according to an analysis published in the Journal of Cannabis Research. Hemp-derived CBD products are not currently regulated by the FDA, and a spokesperson for the agency recently affirmed that the agency is not expected to provide any guidance for either the production or marketing of these products any time soon. It is the current position of the agency that companies which market CBD-infused products as either food products or as dietary supplements are violating the Food, Drugs, and Cosmetics Act.
                                  • Dietary supplement manufacturer NutraScience Labs is expanding in New York State due in part to a pandemic-driven demand increase. "There was an incredible boom last year. … Customers were looking for supplements to boost immunity, help with sleep, ease stress, promote digestion, improve vision and brain activity and, more recently, to get back in shape," said Vincent Tricarico, the company's executive vice president.
                                  • The Centers for Disease Control and Prevention said that cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Health supplement stores are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
                                  • Health supplement stores may struggle to maintain adequate inventory because product manufacturers are having difficulty acquiring packaging materials. Shortages are occurring due to increasing demand for supplements during the COVID-19 pandemic and to competition for packaging coming from the healthcare industry, according to panelists who participated in a webcast by industry news site Nutritional Outlook. Packaging costs have also increased. "...what we’re seeing is that manufacturers are beyond capacity. It’s going to take some time for these manufacturers to be able to build their capacity.
                                  • A survey by the Council for Responsible Nutrition revealed that more than two in five (43%) of dietary supplement users changed their supplement routines since the start of the pandemic. Among those who altered their regimens due to COVID-19, 91% reported increasing their supplement intake, which included adding new supplements to their existing routines (46%); taking the same supplements more regularly (25%); or increasing dose(s) (22%).
                                  • The FTC continues to warn companies about making claims that their products and/or therapies can treat or prevent COVID-19. The agency has received hundreds of reports of consumers purchasing products that lack scientific evidence showing that they have any impact on human health outcomes related to the virus.
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