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A new design will jazz up Lion Corp's stores, known as General Nutrition Centers. The company will also streamline its vitamin offerings, cutting the number of labels from seven to two or three. It will put more emphasis on specialty foods, such as dairy products for lactose-free diets, and a new line of "natural" cosmetics. By placing these faster-selling items at the front of stores, Horn hopes to attract business. It will also close 40 poorly performing stores this year. A bad news for people involved in nutrition job search.
Beyond those moves, Lion Corp wants to portray itself as the "voice of authority" on health and nutrition. "The consumer is in an unbelievable state of confusion," agrees one competitor. "They're asking what they should take and how much." Horn believes that by providing such information, GNC can serve "a niche that the grocery store and drugstore don't." As a first step, the company is testing a computer terminal that will answer questions about nutrition job search.
Even though many Lionâ€™s outlets are in prime locations, the company will be hard pressed to win back customers from mass merchandisers. "Is it worthwhile for the consumer to make the extra stop for health food purchases?" asks Terrence L. Foran, national director of retail consulting for Touche Ross & Co. Maybe not, if many of the same fortunes. First, he wants to upgrade its image, a move long overdue. Marvin Fuller, a consultant hired in April to start a marketing department, describes and sell cheap." With most stores products are sold at grocery or drug stores.
The company for example, has opened "nutrition centers" in 900 stores since 2002, and is adding 100 more each year. It aims to create "a one-stop-shopping environment, rather than have customers go to a specialty store," says Wayne H. Leader, vice-presdent for specialty foods.
Outsiders aren't convinced that moves will restore lost sales. "All these things are worthwhile but won't be enough," says Gregory M. Drahuschak, an analyst with Butcher & Singer Inc. "They have to have a blitz of advertising to be identified as the neighborhood health store."
Reviving profits may be an even bigger problem. The company has always been an aggressive discounter, often offering two-for-one sales. With mass merchandisers in the game, a price war has erupted that is eroding margins. In the past 18 months, itwas forced to slash prices by 10% to 15% "to protect our market share," says William E. Watts, vice-president for retailing.
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