Beauty Beat. Beauty Feeling Effects of the Economy

March 24, 2009 • Beauty


Contrary to popular belief, even beauty is not impervious to the raging recession. NPD Group Inc. announced Monday that total prestige beauty
sales dropped 3% to $8.38 billion in 2008, versus 2007.

Fragrances were the hardest hit, declining by 6%.  Total makeup sales were down by 3% and total skin care sales were flat.

“The economic
realities of 2008 have created fundamental shifts in the behavior of
our consumers and the way they approach beauty,” Karen Grant,
NPD’s senior global industry analyst and vice president of beauty told WWD. “In
2009, we recognize that while consumption will not stop for prestige
beauty, it has changed. It has become and will become more careful,
more selective and more meaningful.”

One bright spot was gift sets priced from $60 to $100. “The biggest shock to our system was makeup,” said Grant. “That’s
where we got blindsided.” She estimated that for eight of the pastLa_mer_foundation
years, “makeup has been the leader of growth. The makeup decline was
the biggest shift,” she added, noting that makeup had been up by 3% for 2006 and 2007.

“There’s saturation of brands, a lot more sku’s coming in,” she continued, “so productivity on counter has dropped off.”

Not doing well in skin care are
the body and sun categories, which “have been challenged,” said Grant.
Also, some facial treatment products, like eye care, facial cleansers
and toners showed declines,” she added.

Still, “The higher end of the market and designer-focused brands seem to be having greater appeal,” said Grant. Also, natural, spa and wellness skin care brands showed the strongest
dollar growth, up 6% versus last year.

Read more "Beauty Sales Down 3 Percent in 2008" here.

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