The beauty category is ripe for expansion in UK grocery stores. Over the past few years, Tesco, Aldi, Marks & Spencer (M&S), and Sainsbury’s made inroads to grab more of the $17 billion spent on beauty and personal care in the UK, as tracked by Statista.
Even in small towns in Scotland, a resident told BeautyMatter that her local co-op, the only supermarket in her town, has added cosmetics. In just the last two weeks, Tesco, the UK's largest grocery retailer, announced that 300 beauty items from Rimmel and Sally Hansen are now available for home delivery.
The confluence of several factors contributes to why grocers want shoppers to buy blush with broccoli, including a pullback on spending, store closures, the convenience factor, and the resiliency of the category. The beauty category is one of only a few categories generating dollar and unit gains. Customers don't want to give up beauty, but under economic strife, some are looking for ways to spend less.
“Mass channels benefitted as consumers looked for affordable products as budgetary constraints brought about the cost-of-living crisis in the UK forcing a polarization of spending, with masstige consumers opting down to mass products to maintain routines,” says Aishwarya Rajpara, Senior Research Analyst for Euromonitor International, a market research provider.
“Consumers are more critical and are untrusting of marketing, taking time to research ingredients and benefits of products before purchasing. Value for money is a priority for consumers as opposed to looking to premium products as a default option for assumed efficacy,” adds Rajpara.
Almost 25% of beauty and personal care sales in the UK were generated in grocery stores in 2022, according to Euromonitor. Although that is down slightly from the year before, experts think the percentage will rise over the next few years as food chains make inroads.
Grocery retailers also see an opportunity to fill a gap left by several store closures. Boots is in the process of shuttering about 300 doors. That's on top of the 2020 shuttering of Debenhams' 124 stores that were destinations for affordable beauty. Debenhams is returning to beauty under the ownership of Boohoo, which just released 200 cosmetics on the retailer's website. There is also a physical Debenhams store with beauty in Manchester and a Beauty Showroom in London.
The original exit of Debenhams opened the way for former Estée Lauder executive Michelle Feeney to bring her indie fragrance brand, Floral Street, to select M&S stores. Floral Street is also sold at SpaceNK in the UK, Mecca in Australia, and US Sephora doors. Feeney calls M&S a perfect partner for Floral Street via the brand’s Instagram.
M&S is cited as one of the best examples of a food merchant burnishing beauty. A competitive advantage is that M&S sells upscale food, fashion, and its renowned underwear. The retailer is known for its proprietary brands including a recently launched skincare line called Fresh Elements. Other owned brands include Apothecary, Formula, and Discover Fragrances. In two years, Apothecary has grown to become a £20m brand, according to M&S. For the first half of 2023, M&S says its clothing and home sales, where beauty is monitored, expanded almost 6%.
Recently, M&S announced a major expansion of Estée Lauder fragrances, including the Beautiful, Bronze Goddess, and Pleasures collections for women and Aramis for men. According to the retailer, the move is part of a broader “Brands at M&S” strategy that brings the number of third-party beauty brands available at M&S to 47. Premium lines include L’Occitane, Benefit, Aveda, and Murad.
M&S also stocks Clinique, which is now the number one third-party beauty brand, per the company. Third-party brands now represent 42% of total sales in M&S Beauty.The company says that 14% of clothing and home customers shopped beauty in 2022 and do so 11.5 times a year.
“At M&S, we’re committed to becoming the trusted editor in beauty for our customers. We’re continuing to innovate with our leading own brands and introducing third-party partners who complement and complete our offer,” says Heidi Woodhouse, Director of Home, Furniture and Beauty at M&S.
M&S is a pioneer in mitigating the environmental impact of beauty. The company has a partnership with HANDLE to ease recycling of beauty packaging. M&S customers can return any form of plastic or aluminum beauty packaging from any retailer, by dropping their used beauty packaging into dedicated boxes located within the store’s beauty section. M&S has a refill option for its Apothecary brand which it said uses 80% less plastic.
Tesco's recent expansion of online beauty is the direct result of customer feedback. According to the company, mascara was in the top 20 most searched for products that weren't available for home delivery on Tesco.com, along with searches for Rimmel and Maybelline.
"Customers tell us that they often search on our website and app for makeup and nail products, so we are incredibly excited to be able to answer their beauty needs for the first time and bring customers even more of the products they are looking for at Tesco," says Tom Lye, Tesco's Category Director for Health, Beauty and Wellness in a press release. Tesco plans to add "thousands" more products including those from L'Oréal Paris and Maybelline to its omnichannel approach to beauty.
Whether purchased online, in store, or from another retailer, Tesco is also encouraging customers to return their empty makeup packaging to all large stores to be recycled. The retailer says cosmetics is one of the most commonly unrecycled items that often ends up in normal household waste. According to the company, Tesco has the largest number of cosmetic recycling bins of any supermarket.
Rajpara at Euromonitor notes that Tesco’s move to remove 20% of VAT equivalent cost from its sun care brand Soleil to make it more affordable was a major statement to help increase usage of sun care and build its awareness for the category.
Sainsbury’s deeper foray into beauty stretches back to 2018, when the retailer earmarked beauty as a priority and an avenue to compete with Boots and Superdrug. The latest move is the introduction of Serum Bars in 106 doors. Amanda Steatham, Head of Transformation at Sainsbury’s calls it the biggest serum bars effort in the US. The retailer says it expects customers will purchase enough facial serums this year to fill five Olympic-sized swimming pools.
The bars are organized by ingredient rather than brand—a strategy US retailers are investigating. According to Sainsbury's, almost 80% of consumers believe ingredients supersede brands when selecting skincare. “Our customers already love to shop facial serums but struggle to decipher what ingredients will be best for their skincare needs. That’s why we have taken inspiration from Parisian beauty boutiques and brought the serum bar concept into the beauty aisles in our bigger supermarkets,” Steatham adds.
“Over 250 of our larger superstores across the UK now offer a premium beauty retail experience with dedicated aisles featuring wooden fixtures, soft lighting, and expert beauty staff on hand to our support customers,” says Steatham. “We offer exclusive brands you can only get at Sainsbury's as well as a wide choice of premium brands, including Isle of Paradise, Bondi Sands, Charles Worthington, Monday Haircare, CeraVe, Essie, Sanctuary Spa, Wake, and Bleach London.”
The quest for value continues to propel sales at Aldi, known for its Lacura brand that is often considered a "dupe" for pricier options. The retailer continues to innovate with the brand, illustrated by the debut of Lacura ProNight Advanced range, which is touted as priced 90% below Estée Lauder.
“Lacura from Aldi has been the focus of much attention, launching multiple products that are budget versions of premium and prestige brands with similar formulations and ingredients for a fraction of the price. In 2015, it launched its Caviar Night Cream as part of its Special Buys range and has since added Caviar Gold to the permanent range,” says Euromonitor’s Rajpara. Private brands in general, according to Euromonitor, have been growing since 2019, and now snare a 1.8% share of the total beauty and personal care market in the UK.
One Londoner welcomed the expansion of beauty in food stores. “Boots has been going downhill in some stores,” said consumer Andrea Zipes, a transplanted New Yorker. She’s happy to see Sephora expanding in London again (Sephora returned to London after an 18-year hiatus in March of 2023) but has been buying from her local M&S for convenience and price.
Other retailers are looking to get in on beauty. Beyond Sephora’s return, Avon recently announced plans to open its own stores. It partnered with Superdrug to start stocking 150 of its products in 100 stores and online. Under its new owner, Aurelius, The Body Shop could regain some momentum. Ongoing pressures on food margins will continue to entice grocers to add profitable beauty items to the mix, experts conclude.
