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Published
Oct 23, 2018
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UK beauty market shrugs off retail sector woes as lipstick effect kicks in

Published
Oct 23, 2018

The UK beauty sector has been outperforming other retail categories and largely shrugging off many of the problems in the retail sector overall, according to a new report.


The 'lipstick effect' has kept the UK beauty sector buoyant since the Brexit vote


Between 2015 and last year it saw sales increases of 18% in premium department stores and 9% in traditional specialist retailers, the UK Beauty Industry report, commissioned by Cosmetic Executive Women (CEW) UK and researched by Mintel, found. That's despite the study period including the 18 months following the EU referendum since when consumer sentiment in the UK has been subdued.

In fact, post-Brexit vote, sales of beauty and personal care products have continued to rise, providing further evidence of 'The Lipstick Effect' as consumers bought more 'little luxuries', such as lipstick, treatments and cosmetics.

This has been important for physical stores as well as e-tailers. While one in three UK consumers are shopping online for beauty, spending an estimated £1.1bn, the CEW report revealed sales in specialist retailers (such as Boots, Superdrug, and The Body Shop) increased from £3.4bn to £3.7bn from 2015-17. Over the same period, beauty sales through department stores rose from £1.7bn to £2bn as consumers sought out prestige beauty brands in physical locations.

Caroline Neville, President of CEW, said that beauty appears to be more resilient than other sectors on the high street: “Bricks and mortar retailing is still crucial to beauty and the primary medium for consumers to interact and purchase brands."

The report found that in 2017, UK consumers spent £25.1bn on beauty, with this figure set to rise to £26.9bn by 2022. While beauty lags behind British fashion's contribution of £32bn to the country's GDP, due largely to higher unit retail prices, over one million people are employed in the UK beauty industry compared to the 890,000 working in the fashion sector.

The UK industry is split into four market categories, which include Beauty Products and Personal Care Products with a 20% share each; Spa, Salon and In-store Treatment Services with a 30% share of total spend; and Hairdressing and Barbershop Services also on 30%.

This makes the UK the world's sixth-largest market for beauty and personal care, worth around £10.2bn in 2017. Per capita spend on beauty and personal care products in the UK was £155 in 2017, the fifth highest in the world.

The total value of the UK fragrance market was £1.8bn in 2017, while make-up added up to £1.98bn for that year. And with travel retail being an important channel for both categories, it's interesting that 24% of UK consumers who visited an airport in the last year, bought products while they were there, spending £650m on tax-free beauty.

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