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Total U.S. Beauty Sales Up in 1Q11


PORT WASHINGTON, N.Y.— Total U.S. beauty sales in the prestige and food/drug/mass channels are trending similarly in first quarter 2011 (1Q11), up 5 percent and 4 percent, respectively, according to the Beauty Cross Channel Monitor, a partner product from The NPD Group Inc. and SymphonyIRI Group. The Beauty Cross Channel Monitor is the U.S. beauty industry’s point-of-sale tracking product that looks at sales performance in department stores (prestige) and the food, drug and mass market, excluding Wal-Mart (FDMx).  Makeup sales, while also trending similarly, tell a slightly different story with the food/drug/mass channel faring better than prestige due in part to the double-digit sales in the $127 million nail segment.

“Despite the current economic situation, the beauty industry continues to trend upward showing growth for the fourth consecutive quarter in both the food/drug/mass and prestige channels," said Diane Nicholson, president, Beauty, The NPD Group. “After a positive, yet cautious 2010, it’s encouraging to see consumers continue to embrace newness and innovation in the beauty space."

According to NPD’s Economy Tracker, 35 percent of consumers planned to maintain or increase their spending in cosmetics and fragrances for 1Q11, up 2 percentage points from last year. This is despite the fact that consumers are also dedicating a larger percentage of their wallets to gas and groceries, as prices of these categories rise.

Prestige versus Food/Drug/Mass—Dollar Percent Change (January to March 2011)

Category                              Prestige               Food/Drug/Mass

Total Beauty                          +5 percent          +4 percent

Total Makeup                        +5 percent          +6 percent

Total Skincare                       +6 percent          +3 percent

Total Fragrance                     +6 percent           Flat

(Sources: The NPD Group/Total U.S. BeautyTrends® Prestige Retail Tracking Service and SymphonyIRI Group / Total U.S. FDM excluding Wal-Mart [Liquid or solid, single item products such as perfumes, EDP, EDT, PDT, EDC, cologne and after shave products]).

In fragrance, the prestige market (roughly five times larger than the food/drug/mass market) grew by 6 percent during 1Q11 versus flat sales in the food/drug/mass channel. The increase in prestige fragrance is due to the positive performance in top existing juice brands, as well as strong sales from 2010 fragrance introductions.

Conversely in skincare, the food/drug/mass channel is triple the size of the prestige channel, yet prestige is trending better, up 6 percent versus 3 percent in food/drug/mass. The face, sun care and gift set segments were key drivers in the growth of prestige skin care.

“Now more than ever, as the beauty consumer evolves and channel shifting continues, the Beauty Cross Channel Monitor is a valuable resource for understanding beauty trends across the prestige and mass markets," said Victoria Gustafson, vice president, Beauty Vertical, SymphonyIRI Group. “Capitalizing on the dynamics between these channels is a critical component to maximizing brand strategies."

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