U.K. consumers will spend more on health and beauty products over the next five years. Annual spend per capita is forecast to rise by £73 to £487, propelling the market to £26.7 billion by 2022, according to a new report by data and analytics company GlobalData.
The UK Health & Beauty Market 2017-2022 reveals that health and beauty will be the fastest-growing sector in the country 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 £3.1 billion in 2022. Investment by Amazon will boost online spend, especially as demands for convenience are targeted via delivery saver schemes, subscribe and save plans, and click and collect services.
“Consumer appetite for new cult products is expected to grow.”
Kate Ormrod, lead analyst at GlobalData, says, “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%, largely due to product innovation. Skin preparation products such as masks, serums, and primers are expected to outperform.
Ormrod says, “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 eroded due to price pressure from general merchandisers and discounters. Online pureplays also threaten to steal Boots’ share.
Ormrod adds. “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.”