A fresh lift in cosmetics sales

October 11, 2011

Women have revived their interest in beauty post-recession, and prestige looks to be leading the way over FDM performance.

Beauty has two faces – prestige and mass – and their trends don’t always match.  

However, they did pattern similarly in Q1 2011, reported The NPD Group/ SymphonyIRI Group Beauty Cross Channel Monitor, when prestige total beauty dollar sales rose five percent and FDM (excluding Walmart) was up four percent.   

Probing deeper, the makeup category performed better at FDM in the quarter, up six percent vs. prestige’s five percent, thanks to a double-digit sales rise in the $127 million (total U.S.) nail care segment.

By contrast, prestige skin care dollar sales grew at twice the pace of FDM – six percent vs. three percent. The difference was even greater in fragrances – six percent vs. flat, NPD/SymphonyIRI stated.

These were earlier signs of a post-recession rebound in beauty that has grown clearer as the year progressed; Q1 was the fourth consecutive quarter of beauty sales rises in both prestige and FDM.  Since then, more good news in prestige, noted NPD:
•    From January through June 2011, total prestige skin care and makeup dollar sales exceeded first-half 2008 pre-recession levels.  All prestige makeup segments grew, led by nail care advances of 65% above the three-year-ago level.
•    Driven by a desire for dramatic eyes, soft lip shades, and bold and bright nail colors, total prestige makeup sales rose nine percent to $1.4 billion in U.S. department stores between January and May 2011. “The trend in makeup today is all about accentuating. The return in popularity of eye products comes with a shift from strong or playful colors, and all-purpose mascaras, to products that subtly punctuate and dramatize features around a flawless and yet natural-looking face. The triple play is in eye shadow, eyebrow and mascara,” said Karen Grant, vice president-beauty and senior global industry analyst at NPD.

She called 2011 “an exhilarating time right now for the beauty industry. Today the beauty consumer is all about making very careful choices. It’s almost as if she’s ready to exhale. What we’re seeing is that despite the consumer confidence being sometimes pretty low, beauty consumer spending is at an all-time high. She’s enjoying beauty. She’s rediscovering beauty. She’s playing with beauty.”

This doesn’t mean FDM fares as well in beauty as prestige channels. According to Nielsen data, the cosmetics category is the only beauty bright spot in U.S. food, drug and mass merchandiser stores (including Walmart). Dollar sales for cosmetics (prepackaged, UPC-coded products only) rose 3.0% a year ago and 4.6% to $4.57 billion in the 52 weeks ended August 6, 2011.

By contrast, other beauty and grooming categories were in negative territory. For example:
•    Dollar sales of fragrances rose 3.6% a year ago but fell 13.7% to $613.0 million in the latest 52 weeks ended August 6.
•    Dollar sales of grooming rose 1.4% a year ago but slid 3.7% to $1.62 billion in the most recent 52 weeks.
•    Dollar sales of hair care declined 1.1% a year ago and 0.1% to $6.53 billion in the latest 52 weeks.
•    Dollar sales of skin care edged down 0.5% a year ago and 0.3% to $4.84 billion in the most recent 52 weeks.