Sephora losing market share to pharmacies offering cheaper products

By Lucy Whitehouse

- Last updated on GMT

Sephora losing market share to pharmacies offering cheaper products

Related tags Supermarket Retailing

Beauty retailing brand Sephora, traditionally a key player on the European cosmetics scene, is losing market share to pharmacies.

According to Kantar Worldpanel statistics, retailers like Sephora and Marionnaud in France have seen a 5% market retail share drop over the last three years, as consumers turn to the cheaper offerings provided in pharmacies.

The enthusiasm for pharmacies also participates in the rise of the naturals trend, as consumers increasingly turn to products offering wellbeing claims alongside those of beauty.

Jean-Paul Agon, head of L'Oreal, told Reuters last month that; "the pharmacy, when it comes to skin care, is the most dynamic retail network in Europe.​"

Cross-continent enthusiasm

Indeed, the trend is not limited to France, but rather is becoming a cross-continent one; in Italy, for example, the ongoing focus on drugstores/parapharmacies was the ‘most important trend’ for health and beauty in 2013, according to Euromonitor International.

Store openings are booming in the country thanks to this growing consumer enthusiasm, as well as being part of President Monti’s Liberalisation Decree. 

The Liberalisation Decree stated that more pharmacies will be allowed to open in Italy, which could lead to an additional 5,000 outlets in the forecast period [up to 2018]​,” note Euromonitor analysts.

In Germany too, consumers are increasingly keen on the pharmacy retail platform, where in the overall health and beauty specialists channel, three drugstores (Dm, Rossmann and Müller) led last year.

In the UK however, both specialist beauty retailers and pharmacies are being usurped as consumer favourite, as supermarkets have begun to dominate the beauty retail space.

Overall, independent retailers and smaller chains continued to suffer in the UK during 2013 as they struggled to compete with their larger chained rivals and chained supermarkets as they simply do not have the capability to compete online, and certainly not on price​,” notes Euromonitor.

Health and wellness

Emerging as a key branch of the rising naturals trend, beauty consumers are increasing turning to products which can make health and wellness claims, such as ‘relaxing’, ‘caring’, and ‘sensitive skin-friendly’.

Key demographic and social developments on the continent have contributed to the rise of the pharmacy, Euromonitor analysts assert, including a constantly ageing population and a rising demand for health and wellness products as a result of increasingly hectic and stressful lifestyles. 

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