Mass Beauty Sales Gains Trending Slower

Mass market shoppers are slowing their beauty spending, perhaps waiting to see which direction the economy is headed.

According to recent NielsenIQ numbers for the four weeks ended July 16, overall beauty sales advanced only 0.2 percent. Mass beauty sales, however, are still up 8 percent over the same time period in 2021.

Makeup sales, which had been improving as consumers returned to social activities and offices, dropped almost 2 percent. According to Stephanie Wissink, equity analyst at Jefferies Research Services, sales of makeup are once again tracking below pre-pandemic levels.

Also hit hard in mass are fragrances, down 5 percent, and nails, which declined 3.2 percent during the time period. Both categories were hard pressed to anniversary gains seen in 2021.

Skin care remained resilient, up 3.8 percent, but also decelerated from earlier this year.

The slowdown in mass comes as big box chains are sprucing up and adding premium products such as SpaceNK at Walmart, Ulta Beauty’s shops within Target, and the upgraded skin care boutiques at CVS.

Experts believe the issue is that mass-market consumers are the most impacted by recessionary fears and rising costs.

In fact, cutting back on spending doesn’t seem to be an issue in prestige. According to data from the NPD Group, prestige beauty sales grew 16 percent to $6 billion in the second quarter, propelled by double-digit growth across most categories. Larissa Jensen, Vice President of Beauty at NPD, noted that the number of higher income consumers in the U.S.  is growing and that could be part of the health of prestige brands, while lower income shoppers are feeling more of the pinch of inflation.

Walmart supported that notion with a warning this week that consumers in its stores are faced with choosing food over fashion and beauty. “Food inflation is double digits and higher than at the end of the first quarter,” the discount giant said in a statement. That is impacting spending on general merchandise, including beauty and apparel.

That’s exacerbated as Gen Z shoppers, who mass merchants are especially trying to covet, enter a period of price sensitivity, according to Euromonitor. They are paring back on the use of makeup products, according to Kayla Villena, Euromonitor’s Beauty Lead. They use only one to three makeup products and favor minimal routines, Kayla said.

Jefferies research noted Coty and Revlon are feeling the impact of the mass slowdown, with sales for the most recent four-week period down 7.6 percent and 5.6 percent, respectively. E.l.f. Cosmetics continues to buck the trend with dollar volume up 14 percent.

Within makeup, the segments shoppers are putting purchases on hold the most included eyelash treatments (down 54.6 percent), contouring and highlighting (down 26.3 percent) and lip color (a decline of 22.1 percent).

The mass market beauty industry, however, could benefit long term if a recession kicks into full gear. In the past, shoppers have frequently traded down to less expensive beauty products.

Click here to download article: https://drive.google.com/file/d/1bNI2IJAd3iG4qN2qLDlHSiltIGgmMOhg/view?usp=sharing