The figures prove the industry to be one of the most resilient during the current economic downturn, showing that growth is still possible despite the fact that many other segments are reporting plummeting sales figures.
Accordingly the market should be valued at £16.3bn (€18.84bn) by the end of the year, according to a new report from Research and Markets entitled UK Health & Beauty Retailers 2009.
Retail figures slide
The figures are particularly good when contrasted with an overall decline for retail sales figures in the UK of approximately 0.6 per cent, a figure that is largely accounted for by the significant economic downturn in the UK.
But that is not to say that things have been easy for everyone in the UK health and beauty segment, with big personal care players such as L’Oreal, Procter & Gamble and Unilever having to offer significant discounts in order to remain competitive.
These companies have been hard hit by consumers switching to cheaper brands, including a range of private label brands, many of which are being marketed by leading supermarket chains such as Tesco and Sainsbury’s.
Private label has the price advantage
Private label personal care products generally retail at considerably cheaper prices than mass market products from the big players, which has meant that many consumers have made the switch recently to offset lower household budgets caused by the recession.
The report highlights how the big supermarket chains have increased their market share at the expense of the specialist mass market players by expanding the shelf space devoted to their own private label personal care products, as well as competing aggressively on price.
Likewise, the men’s grooming segment is also tipped as having significant potential, with the report highlighting the fact that sales in this category increased by 7.5 per cent in 2008 to reach over £1bn.
UK hair care segment hit by consumer cut backs
A recent study by market researcher Mintel has shown that the hair care market in the UK is suffering under the pressure of the economic downturn, stressing the fact that sales of hair conditioners have been particularly affected.
Currently valued at £685m the market value has shrunk by approximately £15m in the space of the last year, a slump that Mintel largely attributes to the fact that a quarter of females it questioned have spent less on hair care recently.
The reason for this is not only a tightening of purse strings, but, just like in the wider health and beauty segment, it is also attributable to price discounting, particularly on the part of major specialists.
Indeed, Mintel believes that the discounting war is likely to wipe a further £6m from the value of the UK hair care market before the end of the year.