UK health & beauty market to hit £27bn despite lacklustre economy
Britain’s love affair with all things beauty is set to send the health & beauty market to a new high over the next five years, despite the gloom surrounding the high street, waning consumer confidence and restricted budgets, according to new research.
Data and analytics company GlobalData estimates that UK consumers will increase their average annual spend on beauty and health products by £73 to £487, with the market expected to reach £26.7bn by 2022.
This means that health & beauty will be the fastest growing sector over the next five years, with retailers benefitting from the essential nature of many items and the selfie culture driven by social media. Product innovation and new ingredients will also support market growth.
In store shopping remains the go-to option for UK consumers, but spend is expected to continue shifting to online and boost the e-commerce channel to £3.1bn in 2022. Amazon, pureplay specialists and market leaders will drive growth, with customer services such as delivery saver schemes, subscribe & save plans, and click & collect services making online shopping easier for consumers.
Kate Ormrod, Lead Analyst at GlobalData, said: “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.”
With a forecasted growth of 27.9% over the next five years, skincare is expected to be the fastest growing subsector, driven by product innovation in both mass and premium markets. Skin preparation products such as masks, serums and primers are expected to outperform.
“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,” continued Omrod.
Boots is expected to remain the market leader in 2017 with a 20.5% share, but its dominance will be challenged by discounters and online pureplays like Amazon, which offer a wider product assortment and cheaper prices.
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