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EXCLUSIVE: U.K. Beauty Industry Worth Billions, Report Details

In 2017, U.K. consumers spent 25.1 billion pounds on beauty, according to a report by Mintel and CEW.

LONDON — Brexit fears and a slow-growing economy have done little to dampen the British consumers’ love of beauty products. In fact, those macro issues are very likely stoking  passion for brow jobs, Botox, hair extensions and conditioning masks, not to mention premium color cosmetics and online beauty purchases.

In 2017, U.K. consumers spent 25.1 billion pounds on beauty products and services, according to a new report by Mintel Group and Cosmetic Executive Women, and that figure is set to rise by around 10 percent to 26.9 billion pounds by 2022.

“CEW: Defining the U.K. Beauty Landscape” will be released on Oct. 22 and is the first report of its kind. It takes a close look at how and where consumers are spending their money, the growing power of beauty service providers, and the all-important “lipstick effect,” which means that during periods of economic downturn, consumers tend to treat themselves to little luxuries.

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The report, which WWD has seen exclusively, points out that the U.K. is the sixth-largest beauty market in the world, and was worth about 10.2 billion pounds in 2017. Last year, per capita spend on beauty and personal care was 155 pounds, the fifth highest in the world.

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Consumers are splashing out in salons and spas, at airport duty-free stores and in department stores, where they’re looking for premium brands. They’re also embracing online sites, which accounted for 10.9 percent of spend in the U.K. last year. One in three Brits bought beauty and personal care products online in 2017.

Caroline Neville, president of CEW’s U.K. division, commissioned the report and is handing it, gratis, to the organization’s 10,000 members. She said the CEW has been looking to raise the industry’s profile for years and to prove that beauty is big business, bigger than sectors such as pharmaceuticals, nonalcoholic beverages and at-home alcoholic drinks.

Beauty Behemoth: U.K. Beauty Industry Worth
Charlotte Tilbury Cosmetics was born, and is based, in London.

“It’s about raising awareness, and we knew that if we wanted to engage with government we had to have more facts and figures to give them. We want recognition of the soft power of this industry,” said Neville.

In an interview, she added, there’s quite an “entrepreneurial spirit” in the U.K., with some 40,000 unique products launched in the country under 1,800 different brands in 2015-17. “It is the most exciting time for beauty — it’s holding a lot of things up.”

The report names brands including Charlotte Tilbury, Josh Wood Colour, Neom Organics, REN Skincare, Lush, Nails, Inc., Pixi by Petra, Sarah Chapman, Elemis, Burberry and St. Tropez among the U.K. “innovative” brands.

On the retail front, the high street may be dealing with a raft of problems, from onerous leases to outdated stores to bad management, but those stores’ beauty businesses remain resilient.

In 2017, value sales of beauty products through department stores grew 18 percent as consumers sought out premium brands. Traditional specialist retailers including Boots, The Body Shop and Space NK increased sales by 9 percent between 2015 and 2017.

It’s no wonder that Sainsbury’s, the British supermarket chain, is getting in on the action with plans to roll out a beauty program with a slew of large and small brands, beauty advisers and the relaunch of its in-house vegan range of products. The supermarket is looking to take on the likes of Boots, Superdrug and Debenhams, and the plan is to revamp store interiors, introduce trained beauty advisers and stock more than 1,500 products.

So far, Sainsbury’s said it has secured exclusive brand partnerships with Mane & Tail, Burt’s Bees, Essie, Korres and Dr PawPaw. According to industry sources, other major, mass-market retailers are mulling similar moves.

Another retail hot spot in 2017 was airport tax-free beauty, with 24 percent of U.K. travelers buying products worth 650 million pounds.

Among the biggest areas of spend were beauty services and hairdressing, which each accounted for 30 percent of the overall 25.1 billion pounds spend. Services ranged from fish pedicures to tanning treatments to fillers and spa breaks. Hairdressing revenues were driven by “extreme” color trends and new conditioning treatments, which Mintel said have helped breathe new life into the sector.

Beauty sales accounted for 20 percent and personal care for the remaining 20 percent. Within the beauty category 1.26 billion pounds was spent on facial skin care and 1.98 billion pounds on color cosmetics. The total value of the U.K. fragrance market was 1.8 billion pounds.

On the trade front, the value of beauty products exported by the U.K. increased 11 percent between 2016 and 2017. Some 66 percent of U.K. beauty exports went to European Union countries, with the Republic of Ireland the largest export market. Exports to North America were up 10.5 percent, while imports from the region rose 15.9 percent.

While the U.K. may no longer be known for its manufacturing prowess, there are pockets of production throughout the country: At least 22 percent of all beauty and personal care products launched in the U.K. between 2015-17 were manufactured in the U.K., according to the report.