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The Vitamin Shoppe CEO on how COVID-19 is changing the supplements industry

Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss the state of the supplements industry with The Vitamin Shoppe CEO, Sharon Leite.

Video Transcript

ALEXIS CHRISTOFOROUS: During the COVID-19 pandemic, many have turned to the supplement industry, looking to everything from immunity boosters to probiotics to CBD products to help cope with the uncertainty that the virus has brought on. Joining us now to discuss how exactly the industry is faring is Sharon Leite, the Vitamin Shoppe CEO. Sharon, good to see you.

You know, I know from personal experience early on and even somewhat recently, I've had a tough time finding things like vitamin C. I like to take elderberry to boost the immune system. What's demand been like for those products, and what has supply been like at the Vitamin Shoppe?

SHARON LEITE: Hi, Alexis. Well, thank you for having me this morning. Well, certainly all of those products have been in hot demand, and we certainly had our challenges in the supply chain early on in the pandemic. Since that time, things are back to normal, and we are well in stock in a lot of those products.

And as you've seen through the pandemic and as we-- you know, from the very beginning from March through the period of today, the thinking on that and what is helping you through this to boost immunity has continued to change. And so certainly we're seeing not only zinc continue to be very strong for us but even Dr. Fauci even just recently said the importance of vitamin C and vitamin D to boost immunity.

So that trend continues, but in addition we're starting to see things around stress, around sleep, around people that have been cooped up in their homes and they're wanting to get back outside. Fortunately, the summer months has helped some of that. And so we're certainly also seeing changes in terms of getting back into the sports-nutrition side of the business with sports nutrition and proteins and other products to kind of help you get back on track and get back to your fitness goals.

BRIAN SOZZI: Sharon, full and fair disclosure, I'm in your stores pretty much every weekend, and I've been noticing a lot more different products, almost like a product-innovation boom. What are some of the newest food trends you're seeing? I see protein chips, different types of bars that these things were not necessarily here before the pandemic.

SHARON LEITE: Yeah, healthy snacking is really important because, as we all know, getting out and your normal routine of going out to eat and, you know, people are getting fatigued potentially, you know, cooking at home. So the ability to get healthy snacks is certainly important, and so we've really certainly leaned in on those types of categories so that we can provide options for our consumers.

You'll certainly see a lot of that. We also-- you know, you mentioned CBD at the top of the segment. And, you know, CBD-- we just relaunched our CBD HQ. We have 20 of the best CBD products out there, all very focused on high quality. We are the only national retailer to sell ingestible CBDs in all of the states where we can. And so those are certainly additional trends that you're seeing in the marketplace today.

ALEXIS CHRISTOFOROUS: Sharon, we know that during this pandemic one of your competitors, GNC, filed for bankruptcy. Now, they did have a very heavy debt load, so different than what Vitamin Shoppe has. But what does that mean for your business, the fact that GNC is going to be closing a bunch of stores?

SHARON LEITE: Well, certainly whenever you lose a competitor in the industry, you know, you certainly want to do everything you can to try to bring those consumers into their fold. And so we hope that we can-- we've reached out to the consumers in the local communities that we serve, and we really hope to earn their business. So you'll see us continue to reach out to them.

We've made some inroads with some of their suppliers and some of their vendors to be a new partner to be able to, you know, carry some of the products that GNC maybe has carried exclusively. So again, that we can be there for that GNC consumer in their local communities.

BRIAN SOZZI: And, Sharon, you recently launched same-day delivery with Instacart, right?

SHARON LEITE: Yes. We've been doing all kinds of different things with, you know, meeting the consumer where they want to be, whether it's BOPUS, which we've done a tremendous amount of work around click and collect and buy online, pick up in-store, curbside delivery. And just in the last couple of weeks, we did launch Instacart. We are one of their-- we have an exclusive relationship with them, and we're excited to be able to compete with Amazon and be able to do same-day delivery now.

ALEXIS CHRISTOFOROUS: Sharon, have you had to close any of your brick-and-mortar stores? I think you had something like 720 of them not long ago. Because of this pandemic, have you had to close any?

SHARON LEITE: Well, through the pandemic, we closed stores like many retailers did. Fortunately, we were considered an essential business in many states, but there were some states and some municipalities where we were expected to close. So at the height of the pandemic, we did have 90 stores closed, and we had, you know, very reduced hours.

But in terms of our real-estate strategy, we look at real estate throughout the year. We have closed approximately 30 stores in the year. That was planned for. But just as recently as this weekend, we just opened two new stores in the New Jersey area, both South Plainfield and-- we're very excited to also be opening stores. So we've opened six stores since the beginning of the pandemic.