American consumers will maintain and even intensify their focus on thrift in 2010, and their frugality is expected to reduce cosmetics purchases by women by nearly 9 percent.
This story first appeared in the December 24, 2009 issue of WWD. Subscribe Today.
According to a survey of 600 Americans, age 25 and up, by AlixPartners’ consumer products group, women are expected to reduce spending on cosmetics by 8.7 percent next year, greater than the 7.5 percent decline expected for prepared food and prepackaged meals or the 3.4 percent drop foreseen for health and personal care items among all respondents.
Seventy-five percent of those surveyed said they expected to be more frugal when shopping for food in 2010 and 55 percent said they would reduce their spending on household-care products.
“In personal care, consumers plan to spend less overall, but indicate they will remain loyal to brand names,” said David Garfield, a managing director of Alix and leader of its CPG practice. He noted that while consumers have been “value shoppers” in 2009, “they have evolved into ‘value-hunters, tracking down deals and perceived value.”
The study showed the consumers in the South are less likely to scale back buying in 2010 than those in other U.S. regions.
“At a time when the CPG industry is already facing lower sales and tighter margins, companies will need to adopt more strategically targeted marketing strategies and leaner cost structures to succeed,” said Rich Vitaro, a director at Alix.