The agency said on Friday that the cosmetics and toiletries industry was set for a 2.5 percent decline for 2020. That’s bigger than the dip from the Great Recession — 0.8 percent in 2009 — and in a 1991 recession, when the industry dipped 0.3 percent.
“A decline of 2.5 percent in 2020 [is] the most likely outcome, with the best-case scenario reflecting a 1.5 percent gain and the worst-case scenario at an 8.1 percent drop,” Kline said in the report. “Given the current state of the pandemic, with lockdowns now inching closer towards summer months, our current worst-case scenario may, in fact, become the most likely scenario.”
“Even our worst-case scenario of [negative] 8 percent probably does not feel steep enough given the dark days we are all living, but there are enough essential categories in the mix to keep the market stable,” added Carrie Mellage, vice president of Kline’s consumer products practice.
Kline predicts that hand sanitizers and soaps, as well as shampoos and deodorants, will do well in the short term, while facial skin care and nail polish may decline in the near term, before picking up as consumers turn to them for routine’s sake. Fragrance and makeup are predicted to be “can-wait categories,” and Kline predicts they will “decline sharply.”
Mellage noted that the cosmetics market should recover in three to five years “as it has in all past recessions.”
“Compared to other industries, the beauty market is fairly recession-proof, and its products will continue to be desired by consumers — both for meeting basic needs as well as an indulgence,” Mellage said, citing the “Lipstick Theory” — that makeup does well during a recession.
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