BERLIN — In 2002, Germany’s perfumery retailers experienced the first “real loss” in 50 years, according to the German Perfumery Association.
This story first appeared in the January 31, 2003 issue of WWD. Subscribe Today.
Perfumery sales in 2002 declined 3.8 percent to $2.7 billion. All dollar figures are calculated from the euro at current exchange rates.
At its annual press conference in Frankfurt on Monday, the association pointed out that downturns in perfumery sales in the Seventies and more recently in 1994 could be viewed as “a market correction. But the year 2002 marked a real loss.”
Unit sales were down only 0.5 percent, but severe price competition significantly trimmed overall sales. “Even intensive discount activities were not able to stimulate the consumer to spend the same or more money than last year in the perfumery,” the association said. Furthermore, consumer traffic was down 10 percent.
By classification, sales of women’s perfumes were down 3.5 percent; skin care lost 2.1 percent, primarily in the middle- and low-priced segment; body care slipped 4.8 percent, and makeup, which had been a boom category in the last few years, decreased 5.1 percent. Men’s beauty products dropped 2.8 percent.
A total of 3,000 perfumeries were in operation in Germany in 2002, compared with 3,100 in 2001. For the first time in many years, it was noted, the number of employees did not grow, reflecting the attempts of pressured perfumery retailers to keep down costs. Personnel costs in German perfumeries represent about 25 percent of turnover.
The forecast for 2003 remains gloomy. In the association’s view, “perfumeries must prepare for a time without growth in the medium term.”