Changing spending patterns leads to decline in value of UK beauty market

By Simon Pitman contact

- Last updated on GMT

Changing spending patterns leads to decline in value of UK beauty market
The value of the UK beauty market fell slightly in 2015, which according to market research company Mintel is all down to Brits seeking out bargain beauty products and treatments while spending more on experiences.

The 2015 figures were revealed as part of Mintel’s latest Lifestyles report and show that affluent Brits are changing their spending patterns in favour of travel, gourmet dining and upmarket wines, a spending pattern that also underlines the two-track economic evolution and recovery.

Mintel’s estimate for the value of the UK beauty and personal care market in 2015 is £16.88bn, which represents a fall of 0.2% compared to 2014, and also represents the first fall in the market since the company's Lifestyle reports were first published.

Lipstick effect is ebbing away

According to Mintel’s research team, this underlines the fact that the ‘lipstick effect’ is slowly fading and being replaced by more expensive indulgences.

The figures also demonstrate that Brits are striving to spend less on beauty and personal care in favour of other categories, with one in seven stating that they have spent less on products in the last 12 months, according to a consumer survey carried out by the company.

And it would appear that where Brits are most cutting down on their beauty spend is in-salon hair services, a trend that is being driven by consumers shopping around for cheaper services.

Colour cosmetics and nourishing products in demand

However, there are two significant areas where the beauty market is showing strong growth. The first is colour cosmetics, which grew by 8% in 2015, mainly off the back of prestige brands, whereas detoxing and nourishing beauty product claims have also proved very popular, with half of women aged 16 – 24 stating they looked for vitamin-enriched soap, bath and shower products.

So if the value of the UK beauty market is falling, just where are Brits spending their money these days? Well, the holiday market was the best performing of the lifestyle categories, rising by 6.5% in 2015, to reach an estimated value of £39.9billion, while the entertainment category rose by 3.7% to reach a value of £30.22bnng  - so indulgence is getting more expensive, it seems.

Underlining this shift, Mintel says that this consumer study also shows that 17% of consumers currently say they would buy themselves a beauty or personal care product as a treat, whereas 27% said they were likely to spend their money on a holiday.

Two-track economic recovery

But this same consumer survey also underlines the significant difference in perceived spending power between more and less affluent households, caused by the two-track economic recovery seen in the UK in the past few years.

Emphasising this, only 16% of consumers in households with an income of under £9.500 said they felt better off than a year ago, whereas 38% of respondents with household incomes in excess of £50,000 said they felt better off than a year ago.

“Whilst there has not been a big improvement in overall consumer confidence, better-off Britons are clearly pulling away from the rest. Higher earners feel more confident about their finances and show more willingness to spend across more indulgent categories, such as leisure, holidays and foodservice,”​ said Ina Mitskavets, Senior Consumer and Lifestyles Analyst at Mintel.

“The term ‘lipstick index’ refers to people’s tendency to buy smaller ‘feelgood’ treats instead of spending on larger-ticket items. However, as people’s incomes have picked up, there is less need to spend in this fashion.”

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