02 Nov 2017
Posted in Press Release
UK health & beauty market set to reach £27bn as it outperforms all other sectors
Despite the prolonged doom and gloom on the UK high street, waning consumer confidence, and restricted budgets, the health & beauty sector has far from lost its appeal. Indeed UK consumers will be prepared to pay even more over the next five years, with annual spend per head forecast to rise by £73 to £487, and the market reaching £26.7bn by 2022 according to GlobalData, a leading data and analytics company.
The company’s latest report: ‘The UK Health & Beauty Market 2017-2022’ reveals that health & beauty will be the fastest growing sector over the next five years. While the essential nature of many items protects the market from reduced discretionary spending, volume growth will benefit from consumers making wants-driven purchases, encouraged by our looks-obsessed culture. Product innovation and new ingredients will also support market growth, making it imperative that retailers keep on top of health trends, or risk losing out to rivals.
While stores remain the primary purchase channel, with GlobalData’s consumer research showing nine out of 10 shoppers buy instore, spend continues to shift online, with sales via the channel forecast to reach £3.1bn in 2022. Investment by Amazon, pureplay specialists and the market leaders will boost online spend, especially as demands for convenience are targeted via delivery saver schemes, subscribe & save plans and click & collect services.
Kate Ormrod, Lead Analyst at GlobalData, commented: ‘Though online accounts for just 8.5% of the market in 2017, online pureplays are poised to make the most of the channel’s growing appeal. The likes of feelunique, Cult Beauty and Lookfantastic hold significant strength in branded ranges, but differentiation will be key to succeed.’
Skincare is forecast to be the fastest growing subsector out to 2022, rising 27.9%, with much of this due to product innovation in both the mass and premium markets. Skin preparation products such as masks, serums and primers are expected to outperform.
Ormrod continued: ‘Consumer appetite for new cult products is expected to grow over the next five years, providing retailers and brands with license to push the boundaries and introduce new innovative items to their ranges to drive impulse purchases and spend per head.’
Boots is forecast to remain the market leader in 2017, with a 20.5% share – though its share has been eroded owing to price pressure from general merchandisers and discounters, echoing its earlier difficulty in fending off the grocers. Online pureplays also threaten to steal Boots’ share with Amazon providing customers with access to a far wider product assortment and a quick and easy way of topping up health & beauty items.
Ormrod added: ‘As Boots does not compete with the discounters on price, driving home a clear point of difference to shoppers and further exploiting its Advantage Card will be important to prevent further share decline, as well as encouraging impulse purchases among shoppers collecting online orders.’