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Published October 5, 2009
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Prestige Beauty Sales Fall in the First Half of 2009




Retail sales of the U.S. prestige beauty industry fell 7% in the first half of the year to $3.7 billion, according to data from the NPD Group, Inc., Port Washington, NY. Moreover, June 2009 marked the 11th consecutive month of negative prestige beauty performance.

Fragrance sales posted the steepest decline, falling 10% to $1 billion. Makeup sales fell 7% to $1.5 billion. The market that fared the best was skin care—sales fell just 6% to $1. 2 billion.

While sales struggled overall, there were some positives in each category, according to NPD. Premium price fragrance juices (prestige fragrances priced at $100 and above) rose 9% in dollars and 6% in units. Fragrances priced just under the premium price point ($75 to $99) also posted an increase, up 2% in dollars and 1% in units. These two components of the prestige fragrance category in first half 2009 continue to capture share of the market and account for almost 30% of prestige fragrance sales.

In skin care, sets and kits showed positive dollar growth in the first half 2009, up 8% in both dollars and in units. Hair (included in the skin care category) posted a modest gain of 1% percent in dollars and 4% in units. Additionally, new facial moisturizer sales proved healthier than other sectors. This category—which accounted for almost a quarter of new product sales in the first half of 2009—posted a dollar increase of 2%, according to NPD.

Within color cosmetics, while overall new launch makeup dollar volume dipped 7%, new face makeup product sales grew in both dollar and unit volume, led by double-digit increases (ranging from +11% to +59%) in foundation, blush, concealer and other face. In the eye segment, new mascara sales posted an increase of 4% percent while new lipcolor sales rocketed up 47%. Meanwhile, premium price face products ($50 and above) have almost doubled in volume during the past four years. Although still a niche category, it grew 5% in dollars and 2% in units in the first half of 2009.

“The results in first half 2009 are in many ways a continuation, and perhaps, an escalation of the trends we have been seeing since the start of the 2008 recessionary period,” said Karen Grant, vice president and global industry analyst, The NPD Group. “As consumers continue to hold tight onto their wallets, the criteria of what products they choose to spend on is increasingly driven by those that they find personally meaningful and worthy of investment. In this challenging retail environment, it cannot be overstated how increasingly important it is for manufacturers and retailers to take careful note that there are items that are resonating well with consumers. They need to understand what those products are and see how they can potentially leverage that learning into winning with other beauty categories.”

More info: www.npdgroup.com

Tanning Salons Growth is Spray Tans



In addition to being a discretionary service in a troubled economy, growing concerns about skin cancer and the rise of a health-conscious society are hindering the $2.7 billion tanning salon industry. According to industry research firm IBISWorld, the market will decline by 5.1% this year.

However, there might be one bright spot for the industry: the shift in consumers moving from tanning beds to tanning sprays.

“By far, ray-lamp skin tanning is the number one revenue source for tanning salons at 72%, but growing awareness of the high cancer risk associated with their use continues to diminish market share,” said George Van Horn, senior analyst with IBISWorld. “Profit levels are higher with spray-on tanning booths; therefore the shift toward these substitutes may actually improve the industry.”

Although UV-bed tanning sessions on average cost from $5 to $7, the industry is reliant on high turnover, with sessions typically lasting 15 to 20 minutes. The rising popularity of spray-on tanners, which now account for 11% of industry revenue, is expected to grow to a whopping 17% in 2009, according to IBIS.

“Tanning salons are operating in a mature market, and to stay in the game salons need to adapt to market trends and offer innovative spray-on tanning products and services,” added Mr. Van Horn. “Because this is a long-term shift, those who diversify their menu, such as providing health and beauty services, will also have a greater chance in generating revenue.”

More info: www.ibisworld.com

The H1N1 Soap Opera: Are Americans Handwashing?



With school back in full swing, concerns over H1NI—more commonly known as swine flu—are heating up again. Parents, caregivers and education officials are stocking up on hand sanitizer and disinfecting wipes and pushing healthy hygiene habits to help prevent the spread of the virus, which made headlines near the end of the last school year.

Basic hand washing with soap and water is said to be one of the best defenses, but is anyone doing it?

According to a recent poll on H1N1 flu conducted by the American Red Cross, Americans are taking or planning on taking extra measures, like covering their coughs and sneezes with tissue (78%) or washing their hands more carefully (76%) to avoid getting the flu.

Yet other polls show that maybe consumers aren’t hand washing more often—or telling the whole truth about it—since H1N1 became part of our lexicon.

In a national survey by Bradley Corporation, a Milwaukee, WI-based manufacturer of commercial bathroom and locker room furnishings, 54% of respondents said they “wash their hands no more or less frequently” in public restrooms since the H1N1 virus emerged.

Bradley’s survey, conducted online at the end of July, queried 1,020 Americans about hand washing in public restrooms. Respondents ranged in age from 18 to 65-plus and were equally divided by gender. Although 87% said they did wash their hands after using public lavatories, other responses indicate some may have exaggerated how often they did the job correctly. When asked if they had also used soap, the numbers declined slightly to 86%, yet 55% of the group admitted on occasion they’ve simply rinsed, without using soap.

In the Soap and Detergent Association’s recent nationwide survey of 888 adults, 93% of respondents said they believe that steps such as good hygiene will help limit its spread, but only one-third said they changed their overall hygiene habits in response to the growing concerns about H1N1.

“Simple but effective, everyday practices can help protect public health and guard against colds, flu and the H1N1 virus,” said Nancy Bock, SDA’s vice president of education. “We can combat H1N1 at home, in schools and the workplace if everyone does their part.

Ms. Bock’s sentiments were echoed by Jay Butler, director of CDC’s H1N1 Vaccine Task Force during an Aug. 22 briefing on the flu virus.

“It’s best that we plan and prepare for lots of flu activity, and that’s a good assumption, given that we expect to see both the 2009 H1N1 virus and the seasonal influenza viruses, causing illness this fall. I’ve talked mostly about vaccine, but it’s important to remember that we have to continue to do the other important things to control the spread of influenza, including hand washing, respiratory etiquette, that is, cover your cough and to protect others, stay home if you’re sick,” Mr. Butler said. “And finally, we can’t stop the tide of flu any more than we can turn a hurricane in its course or stop the earth shaking during an earthquake, but we can mitigate the effects and help prevent people from becoming severely ill by preparing well and acting effectively.”


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