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What’s Next for Bath and Body Care?

By: Carrie Lennard, Euromonitor International
Posted: June 22, 2010, from the July 2010 issue of GCI Magazine.

According to Euromonitor International, growth in the global beauty market slowed to 4% in 2009, down from 5% in 2008, as a result of increased price sensitivity and consumer cutbacks that fueled demand for less-expensive brands and private label products. As a rule, commodity categories such as bath/shower and body care performed better than discretionary categories in 2009. While growth rates may not have been the highest, key basic categories such as bath and shower produced the most consistent growth in the face of the recession.

Changes in Consumer Retail Preferences Hurt Premium

There was a marked decrease in footfall in speciality stores and department stores in 2009 in favor of more mass-market outlets, which had a negative impact on sales of premium-priced bath and body care products. Parapharmacies/drugstores were the main beneficiaries of the global recession, as consumers traded down in terms of where they bought most of their bath and body care products. As sales through department stores took a hit, the global premium bath and shower segment slipped into negative growth in 2009, posting a 0.5% decline, according to Euromonitor figures.

Private Label Sales on the Rise

The onset of the recession meant that, in regions where available, private label made significant gains in the more commoditized categories of bath/shower and body care, which were also impacted by discounting. The presence of private label is stronger in categories in which consumers feel they can easily trade down to cheaper products without noticing a difference in quality or function. Sales are particularly strong in Western Europe, a region with a strong concentration of chained retailers and a high level of consumer trust in retailer brands. As a result, private label held a significant 12% share in 2009 in the bath and shower category in Western Europe. During the economic downturn, private label bath and shower products benefited from their low prices, which make them attractive to consumers. As a result, multiple retailers in the region launched more segmented variants of shower gels, often targeting the lowest end of the price spectrum.

Depilatories Remain a Niche Category Globally

According to Euromonitor, with sales of just less than $4 billion in 2009, depilatories accounted for only a 1% share of total global beauty and personal care value sales. Furthermore, sales continue to be highly concentrated in Western Europe and North America, with these regions alone commanding 70% of the sector’s 2009 global value sales.