LONDON — In the U.K., beauty means business, according to a report set to be released this month by the newly formed British Beauty Council, and seen by WWD. In 2018, the sector generated 27.2 billion pounds in consumer spending, contributed 28.4 billion pounds to the nation’s GDP and supported 590,500 jobs.
The report, “The Value of Beauty,” aims to quantify and classify the industry, with a focus on its value to the U.K. economy. The report divides the industry into three different sections — personal care and maintenance, personal enhancement and services.
Two percent of U.K. households’ total consumer spend goes toward all beauty products and services.
Some 10.4 billion pounds was spent on personal care and maintenance products such as skin, nail, hair care and hygiene, while 8.7 billion pounds went into purchases of personal enhancement products such as cosmetics, accessories and applications, nail color and personal fragrance.
The remaining 8 billion pounds was spent on beauty services, including holistic treatments, hair, feet and nail appointments and hair removal. Hair was the top beauty service last year, while a significant portion of expenditure was on cosmetics and skin and body care.
“The important takeouts for me are that the beauty industry contributes more than motor vehicle manufacturing to Britain’s GDP. Our overall contribution to GDP is that of the entire contribution of either Manchester or Glasgow, and our tax revenue would pay the salaries of 250,000 nurses or midwives. When you put it in these terms it really does raise the game a bit,” said Millie Kendall, chief executive officer of the The British Beauty Council.
The British Beauty Council, which launched last September, is a consumer-facing, industry organization inspired by the British Fashion Council.
While there are beauty-related trade organizations in the U.K. that promote the industry and raise money and awareness, the BBC said it wants to speak to the broadest possible audience.
L’Oréal is one of the founding patrons, and funders, of the new organization, and the BBC worked with academics at Oxford Economics to value the entire beauty industry, including supply chain and logistics for the new report.
The beauty industry is also bucking the high street decline as Local Data Company, in partnership with the British Beauty Council, calculated an increase of 1,394 beauty service spaces over the past year. However, retailers of beauty products declined by 169.
Over the past few months, retail giants Boots and Debenhams have strengthened their respective beauty portfolios. Earlier this year, both unveiled new concept spaces in their stores, adding elements such as play tables, and made shop floors easier to navigate. Sainsbury’s also plans to break into the beauty business by rolling out dedicated beauty spaces in select stores.
Luxury retailers are making big changes, too. In June, Harrods unmasked phase one of its new beauty hall. When completed at the end of the year, the hall will be 53 percent bigger than its former space. Harrods’ new space will also have a dedicated treatment and beauty service area that will offer a range of services such as infusion drips, blow-dries, makeovers or facials.
The BBC report said retailers supported a 7.9 billion pound contribution to beauty services, which was the largest contributor to the U.K. GDP beauty figure in 2018. The beauty service segment provided jobs to 150,300 people, the highest provider of employment in the industry. Retail came second, employing 122,800, with 57,000 people working in wholesale.
“I hope that the workforce across the nation is proud of these figures, I hope we continue to grow our digital presence, support our manufacturers, raise our standards both in terms of sustainability and education across the sector,” said Kendall.
Aside from contributing more than 1.3 percent to the whole U.K. economy in 2018, the beauty industry has boosted productivity through skills training and new marketing channels. This includes the rise of digital influencers who either work with brands to promote their products or act as brand ambassadors.
The report revealed there are more than 2,768 influencers, both micro and macro, with a presence in the beauty industry. British beauty brand Revolution partnered with influencer Carmi for its Pride capsule and British influencer Victoria Magrath from In The Frow is part of L’Oréal’s beauty squad. Last year, Primark tapped beauty and makeup influencer Alex Steinherr to launch an affordable skin-care line across select U.K. stores.
According to the British Beauty Council, skills training will continue to increase employment rates and add greater value to the U.K. economy. The rise of digital influencers, meanwhile, will enable brands to promote themselves across new channels generating greater brand value.