Companies: GNC Holdings (GNC) & Vitamin Shoppe (VSI)

Blueshift’s initial research indicates mixed results for GNC’s future sales with stores reporting steady sales while customers shift to online competitors.

1. Blueshift primary interviews with two men in their mid-20s indicate that they have decreased their store visits and spending at GNC in recent months. The ability to order supplements online from sites like bodybuilding.com that are cheaper even after shipping costs, and their increased annoyance with aggressive GNC sales personnel pushing propriety brands were noted for the change in behavior.
2. Calls to three GNC store locations throughout the U.S. revealed that sales and store traffic remain consistent with three months ago. One store associate noted that during and after the Olympics new customers ventured into his store location and sales spiked, but only temporarily.
3. Blueshift’s April report found both GNC and Vitamin Shoppe well-positioned to support current store expansions, with market saturation of little concern.  Also helping GNC combat the possibility of falling same store sales is the company’s exclusive access to certain products, effective advertising campaigns, strength in sports nutrition products, and growing younger population, with 25% of gold card sales coming from those aged 19 to 29, compared to 17% in 2006. Suppliers and industry specialists in Blueshift’s June report found that GNC’s sales would fall as much as 6% if it were to remove DMAA products from its stores, though all but two sources said consumers would quickly find alternative pre-workout supplements if DMAA products were no longer available.

To gain insight into future sales trends at GNC, Blueshift will gather data and issue a market research report from sources in the following areas: Supply chain, GNC stores, VSI stores, GNC customers, VSI customers, and industry specialists.