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The Department Store View: The Year Ahead

Karen Grant, vice president and global industry analyst at The NPD Group, shares her predictions for 2010.

“We are projecting that 2010 will be better, still in decline but not as dramatic as [last] year,” said Karen Grant, vice president and global industry analyst at The NPD Group. She said the fragrance business in the U.S. prestige market is expected to be soft, down 3 to 5 percent, and makeup will be “tough as well,” flat to minus 2 percent for 2010. “Skin care is the most resilient,” she said, predicting the category might be flat to up 1 or 2 percent for this year.

 

Speaking of U.S. department stores, Grant said, “Women are reevaluating the prestige channel. It needs reexamination and reinvigoration.

 

“We continue to see erosion in the way women are using the category. Fewer women are using beauty products for the whole market, not just prestige but overall. The recession forced consumers to reevaluate what’s important.”

 

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However, the situation looks brighter in Europe, where NPD also tracks sales. “France is doing better,” Grant noted. “The fragrance market is more stable: two-thirds of sales.”

 

She said the per-capita expenditure on beauty is higher in France and the population has a different view of beauty; not using the products is not an option. In France, the brands have been energizing consumers with in-store promotions in the last two years. In Spain, however, the business is tough, Grant noted, but China “is still on fire.”