US health food giant plans 400 UK stores

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The Independent Online
GNC, the US giant, is attacking the fusty UK health food market with loyalty cards and touch-screen information as it opens the first of 400 planned stores.

GNC entered the UK a year ago when it acquired the family-owned Health & Diet Group. Its new three-year programme of openings kicks off in Bristol in October. Fourteen more will be up and running by the end of the year, and from April 1997 there will be five new shops every month. H&DG's 21 outlets continue to operate as Health & Diet Centres.

The UK health food market is forecast to grow by 20 per cent to pounds 746m by the turn of the century. GNC's managing director, Margaret Peet, says the company is targeting the better-informed customer dissatisfied with mass-market rivals. It also aims to corner the underexploited sports nutrition market with the first full product range on sale in the UK. This puts GNC head to head with market leader Holland & Barrett, which staged an aggressive but unsuccessful takeover bid for H&DG in 1994. "Competition is never a bad thing. Perhaps they've had it their own way for too long," Ms Peet said.

The loyalty card scheme costs pounds 10 to join. It gives customers a 20 per cent discount on the first Saturday of each month and free subscription to the American news stand magazine Let's Live.

The independently compiled Health Notes On-Line is the first use of touch- screen systems in the health food sector. It gives information on homeopathic and herbal remedies as well as vitamins and minerals. "It will mean GNC customers are more informed than anyone else," Ms Peet said. "Nutritional information doubles every five years. It's a constant learning curve."

GNC has already invested pounds 1.5m in new technology and backroom systems. The company is now looking to buy a tablet manufacturer and has longer- term plans to double the size of its Manchester manufacturing plant to around 900,000 sq ft. It already supplies own-label ranges both to Boots and independent operators.

So far, the company has 2,651 stores, mostly in the US, and plans to expand into continental Europe once it is established in the UK.