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What's Dragging Mass Market Beauty Gains?

Published March 5, 2024
Published March 5, 2024
Walmart

Beauty sales are booming in both mass and prestige. Although the mass market produces more total dollar shares, the prestige sector pumped out higher dollar and unit gains over the past few years.Prestige beauty sales jumped 14% in 2023 versus 6% for the mass market, according to Circana. The class-beating-mass trend baffles experts who point to upgraded beauty assortments in mass market stores, including the Target/Ulta Beauty and Kohl's/Sephora partnerships.Walmart is also upgrading its beauty assortments and store experiences. Compounding that, consumers have expessed interest in pulling back on spending—just not on beauty, yet.The drugstore segment is taking the hit for some of the softness. Footfall in pharmacies has suffered since consumers are not rushing in for vaccines and test kits at the pace produced over the past two years. That has a rub-off impact on overall front-of-store sales, including beauty, which is often an impulse purchase.NielsenIQ (NIQ) data bears that theory out; the drug channel produced the second-lowest gains in beauty sales last year at 5.8% (behind DTC, which posted an 8.5% loss). Compounding the results is that a portion of the gains can be traced to price increases since drug unit movement declined by 1.9%.In comparison, mass stores (excluding drug) generated a 10.3% increase in beauty dollar volume. Grocery retailers who have been burnishing their beauty assortments produced increases of 7.6%. That is on a smaller total dollar measure, but units rose 9.5%, so the hikes weren't only price-based.

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