Following the UK’s vote to leave the European Union earlier this year, dubbed ‘Brexit’, various industry bodies have come forward to suggest its likely impact on beauty and personal care. For our recent roundup of industry views so far, click here.
Euromonitor is the latest to come forward to comment on the likely market impact of the move in the UK in a recent blog post on its website.
Irina Barbalova, global lead, beauty and personal care, is one analyst featured. She notes: “The true impact of brexit is yet to transpire, but as it stands Euromonitor’s projections are indicating a fairly muted impact on the overall beauty industry globally.”
Areas for potential fallout
Indeed, the market expert suggests that if the worldwide industry sees much shift, it is likely to be limited to discretionary segments, including fragrance.
“Potential segments that could be affected are discretionary items such as fragrances where a higher premium-mass polarisation could be evident,” Barbalova suggests.
“Ultimately, impact will be varied across different beauty companies depending on their exposure to the UK market, and their premium-mass involvement.”
UK in the firing line
Media Eghbal, head of countries’ analysis with the firm notes that the UK is the market with the most at stake.
“Trade negotiations are going to form a vital part of any Brexit deal and this is particularly important for the UK, because exports to the EU accounted for 45% of total UK exports in 2015. Imports from the EU accounted for just over half of the UK’s total imports in the same year,” the market analysis explains.
Michelle Grant, head of retailing research with the firm agreed, noting that spending among British consumers may drop. However, this may be offset by tourism.
“The UK retailing industry faces a potential drop in demand if consumers pull back on their spending due to the uncertainty surrounding Brexit. These retailers are also contending with an increase in cost due to the devaluation of the pound. One bright spot might be an influx of tourists looking to shop when the pound is at historic lows,” she said.