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Health & Beauty in the UK | Verdict Sector Report

Health & Beauty in the UK | Verdict Sector Report

Summary

Over the next five years, the UK health & beauty market will be driven by product innovation, consumers becoming more interested in their looks and health, rising obesity and an ageing population. Product advancements like multi-purpose skincare and cosmetics, and medicinal ingredients used more in health & beauty products will aid the market to grow by over 23.0% by 2020.

Key Findings

  • Understand which categories within health & beauty will perform the best and offer the most opportunities, using our expenditure forecasts to 2020
  • Use our market share and channels of distribution forecasts to find out which retailers and channels pose the biggest threat
  • Discover our quarterly forecasts to Q4 2017 by sector, to understand short term growth trends and how inflation and volumes will impact the market
  • Identify the market drivers and inhibitors, and implement our strategies to improve sales and maximize opportunities in this price competitive sector
Summary

Inflation will be driven by the premium end of the market as smaller retailers and beauty brands use innovation to justify higher price points. Moreover, beauty brands will encourage additional spend by introducing newness more regularly – enticing shoppers to impulse purchase.

Intense competition by the grocers and discounters in everyday items such as toothpaste and handwash will impact expenditure as prices are forced to stay low. Though volumes will continue to increase as shoppers are enticed to bulk buy products via promotions and discounts.

With the highest population growth in the next five years, yet the lowest spend per head, the 65+s must be better targeted via specialist product and tailored services and marketing. Retailers will continue to miss out on incremental spend unless they drive up basket size and the frequency of shopping trips from this consumer group.

Reasons To Buy
  • What is the health & beauty market size and how will it develop over the next five years? What is driving and inhibiting consumer spend?
  • Which channels have performed the best, and which channels will see their share of the market decline over the next five years?
  • How will the specialists perform against the grocers and general merchandisers in the next five years?
  • What is the fastest growing health & beauty sector and why? How should retailers better tap into this market and take advantage of rising spend?


  • Outlook
    • Overview
    • Main Conclusions
      • Product innovation in skincare drives growth of 3.5% in 2014
      • The growing disparity between 65s, 75s and 85s must be targeted with tailored ranges
      • Rising levels of obesity have increased health problems, driving OTC growth
      • Personal care shoppers fall by just over 900,000 in five years
      • The health & beauty market will reach almost £25bn in 2019
      • Men's toiletries will grow 26.7% in five years to 2019
      • Far and Middle East deemed more attractive than much of Europe
      • UK online health & beauty market reaches £1.2bn in 2014 as consumers shift spend online
      • 50.4% of consumers in the UK view private label products as good alternatives to name brands
      • General merchandisers take UK health & beauty share from grocers and specialists
  • Recommendations
    • Overview
    • More Innovation and Better Targeted Ranges are Vital
      • Invest in innovation to drive consumer willingness to spend
      • Drive spend from 65+s
      • Target younger shoppers with product education and video tutorials
      • Grocers must limit bulk-buy promotions and enhance product availability online
      • Understand online shopping habits and customer journey
      • International
      • Use tailored private label ranges to differentiate from rivals
  • Market Size
    • Overview
    • Market Definition
      • Table Health & beauty market definition, 2015
    • Summary
      • Health & beauty share of total retail spend rises
    • Expenditure Trends
      • Product innovation in skincare and cosmetics drives growth of 3.8% in 2015
      • Strengthening economy encourages spend
      • Rise in interest rates and 2015 election will have little impact on health & beauty
        • Table Total health & beauty market expenditure, 2005-15e
    • Sub-sector Expenditure Trends
      • Essential nature of some products supports growth
        • Table Consumer spending (£m) and growth rates (%) in key health & beauty categories, 2010-15e
        • Table Category shares of the health & beauty market (%), 2010-15e
      • Winners and losers
    • Spend per Head
      • Consumers spend an additional £48 on health & beauty than five years ago
      • Potential to grow spend from the 65+s
    • NHS Receipts
      • NHS receipts for all health & beauty retailers
        • Table NHS receipts (£m), 2008-13e
      • Pharmacy store numbers see another big increase in 2013
        • Table UK pharmacy store numbers, 2008-13e
        • Table Number of pharmacies by type, 2008-13e
  • Market Forecast
    • Overview
    • Market Definition
      • Table Health & beauty market definition, 2015
    • Summary
      • Health & beauty to grow its share of total retail to 7.0%
      • Strategies for success
      • Growth drivers and inhibitors
    • Expenditure Trends
      • Key findings
        • Table Health & beauty expenditure, inflation, volume and value, 2015e-20e
        • Table Consumer spending (£m) and growth rates (%) in key health & beauty categories, 2015e-20e
        • Table Category shares of the health & beauty market (%), 2010-15e
      • Winners and losers
    • Sub-sector Expenditure Trends
      • Beauty
      • Babycare
        • Table Babycare expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Bathroom toiletries
        • Table Bathroom toiletries expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Cosmetics
        • Table Cosmetics expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Dentalcare
        • Table Dentalcare expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Haircare
        • Table Haircare expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Men's toiletries
        • Table Men's toiletries expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Paper products
        • Table Paper products expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Perfumes
        • Table Paper products expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Skincare
        • Table Skincare expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Other beauty
        • Table Other beauty expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Health
      • OTC medicines
        • Table OTC medicines expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Other health
        • Table Other health expenditure, inflation, volume and value and share of sector, 2015e-20e
    • Spend per Head
      • Retailers have potential to capitalise on additional £75 consumer spend in five years
      • Potential to grow spend from the 65+s
    • Health & Beauty Specialists' Sales
      • Key findings
      • Forecasts
        • Table Health & beauty specialists summary, 2010, 2015e and 2020e
        • Table Health & beauty specialists' sales at current and constant prices (£m), 2010e-20e
        • Table Sources of growth at health & beauty specialists (%), 2010-20e
        • Table Health & beauty specialists' selling space, 2010-20e
    • Health & Beauty Quarterly Expenditure Forecasts
      • 2014
      • 2015
      • 2016 and 2017
      • Health & beauty
        • Table Health & beauty expenditure (£m) and growth (%), quarterly, 2013-17e
      • Beauty
        • Table Beauty expenditure (£m) and growth (%), quarterly, 2013-17e
      • Health
        • Table Health expenditure (£m) and growth (%), quarterly, 2013-17e
  • Channel Shares
    • Overview
    • Grocers Lose Share to General Merchandisers
      • Table UK health & beauty channels of distribution expenditure (£m) and share (%), 2014, 2015e and 2020e
  • Market Shares
    • Overview
    • Grocery Players Continue Upward Trajectory
      • Table Health & beauty market shares (%), 2010-15e
      • Winners and losers
        • Table Smaller grocers' health & beauty market shares (%), 2010-15e
    • Key Operating Statistics
      • Holland & Barrett sales growth boosted by space expansion
        • Table Health & beauty retailers' key UK operating statistics, 2013/14e
      • Boots, Morrisons, Savers, Sainsbury's and Superdrug have improved margins since 2008
      • Savers' and Holland & Barrett's sales benefit from increased space growth
  • Sector Trends
    • Overview
    • Shopper Profile and Spending Habits
      • Shopper profile
      • Retailer statistics
        • Table Consumer statistics for leading personal care retailers (%), 2014
      • Loyalty drivers
    • Online Shopper Profile and Journey
      • Online health & beauty market
      • Shopper penetration and profile
      • Health & beauty online shopping journey
      • Cosmetics is the most bought sub-sector, aided by online availability of beauty brands
      • Achieving a high conversion rate is instrumental for health & beauty retailers
      • 18.5% of food & grocery spend goes on health & beauty products
    • Private Label Advancement Provides Differentiation for Specialists
      • Private label ranges allow retailers to become destinations
      • Private label perception
      • UK females are more swayed toward buying own brand ranges than males
      • Innovation and convenience add value and change the perception of own brand products
      • Specialists tier their own brand offers to appeal to wider customer bases
    • Rising Consumer Wealth Drives International Expansion
      • Country attractiveness and competition
      • Rising consumer wealth must signal market interest among retailers
        • Table The percentage of consumers who agree/strongly agree and disagree/strongly disagree that their disposable income is increasing (%), 2014
      • Spenders and savers
    • Department Stores
      • Department stores' health & beauty sales have grown by 32.7% in the last five years
      • Department stores continue to play catch up to the grocers and general merchandisers
      • Department stores must understand their health & beauty shoppers to satisfy their needs
      • Debenhams holds the highest visitor share in 2014
      • Loyalty drivers
    • Ageing Population Impacts
      • Older shoppers increasingly important
      • By region: the south provides most opportunities
      • By channel: local pharmacies, grocers and online players
      • By category: skincare, OTC medicines and dental care
    • Premium Poses Opportunity
    • Monthly Subscription Sample Boxes
      • Subscription boxes can benefit both brands and retailers
      • Tailoring products can help satisfy customers' needs but will push costs up
        • Table 10 Rows, 5 Columns
    • Store Format Innovation
      • Standalone spin-off stores enable existing retailers to branch out
      • Pop-up shops allow retailers to react quickly
      • Concessions can help both brands and retailers expand their reach
    • Male Grooming Growth Area
      • Summary
      • Store opportunities
      • Online
      • Subscription services
  • Methodology
    • Methodology: Outlook
      • Market size
      • Market shares
      • Sales density calculation
    • Methodology: Market Size
      • Market size
      • Market shares
    • Methodology: Channel Shares
    • Methodology: Market Shares
      • Market size
      • Market shares
      • Sales density calculation
    • Methodology: Sector Trends
      • Market size
      • Market shares
    • Definition
      • Market Size
      • Market Forecast
      • Channel Shares
  • Appendix
    • About Verdict Retail
    • Disclaimer

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