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Luxury market remains steady despite fragrance wobble

By Guy Montague-Jones, 18-Feb-2008

Sales in the luxury beauty industry in the US grew steadily in 2007 with make-up leading the way and fragrances bringing up the rear, according to an NDP Group market report.

In the context of an economic slowdown the market research company said sales in the prestige beauty market increased 2 percent to $8.9bn last year.

Make-up

Despite lip product sales falling two percent, make-up had a good year with sales rising 4 percent to $3.4bn.

Consumers were filling their shopping bags with mascara and foundation at cosmetic stores as the eye and face segments drove growth in the make-up market.

The market category has enjoyed consistently strong growth in recent times increasing in value by 17 percent in the last five years.

Skin care

Skin care products also proved popular with luxury consumers, as sales increased by 4 percent last year to $2.5bn.

Anti-aging was the principle driver in the luxury skin care market, which includes face, body, sun and hair products.

While sales of basic skin care products were down 1 percent, anti-aging product sales rose 5 percent to $1.2bn

Fragrance

Meanwhile luxury fragrances failed to match the success of their counterparts in skin care and make-up with overall sales slipping 1 percent to $2.5bn

However, sales of fragrances that have been on the market since 2006 or before grew by two percent suggesting that consumers are returning to well-known and trusted products.

"It may be that consumers are finding comfort in familiar brands because of the crowded marketplace," said NPD analyst Karen Grant.

Commenting on the poor sales, she also said around one-third of fragrance sales are made in December but this year scents were competing against hot consumer items like GPS systems and digital picture frames making harder for them to stand out.