Despite pressures on consumer spending in 2008 health & beauty will see its highest growth rate in a decade, fuelled by a greater number of male shoppers, price inflation and women's search for eternally youthful looks, says Verdict Research in its latest report - UK Health & Beauty Retailers 2008.In 2007, consumer expenditure on health & beauty products rose by 4.7% to GBP15.6bn, outperforming total UK retail again - as it has done in every year since 2003. 2008 looks set to be even stronger with health & beauty taking the crown as the UK's fastest growing retail sector.
Men are also investing more in their appearance, creating another driver of market growth. Total sales of men's toiletries are forecast to grow by 7.7% in 2008 as wider availability and a better selection of brands and products encourage more men to try out new products.
In 2008 retail growth will slow as consumers' disposable income is squeezed by higher mortgage costs, utility prices and transport costs. Combined with a slowdown in the housing market and lower consumer confidence, people are deferring expenditure on big ticket items and home improvement projects, which Verdict forecasts will leave total retail growth at just 2.8% for the year.
Nevertheless, Verdict forecasts health & beauty market growth to increase, aided by people trading up to more expensive products in categories such as skincare. Indeed, with many consumers holding back from big ticket expenditures, there is room in the consumer purse for a greater proportion of smaller luxury purchases. As many premium beauty products claim improved benefits, yet are still relatively low cost, they are easier purchases for consumers to justify and are well placed to grow in 2008 and beyond.
"In uncertain times people are still willing to spend money on making themselves look good and feel good," says Carol Ratcliffe, Retail Analyst at Verdict Research and author of the report. "If you're holding back from buying expensive items, there is more scope for smaller indulgences. Health & beauty products are ideal for this: it doesn't cost much to treat yourself and even premium brands are relatively accessible."
Price inflation is another important factor following a year of rising raw material, manufacturing and transportation costs. Verdict expects these higher costs to be partly passed on to consumers in the majority of beauty categories, with inflation peaking in 2008 across the market as a whole.
"Higher prices won't put people off buying health & beauty items," adds Ratcliffe. "Most of these products are seen as essential so the majority of people will be spending more this year on health & beauty - even if they aren't interested in more advanced products."
Men are also investing more in their appearance, creating another driver of market growth. Total sales of men's toiletries are forecast to grow by 7.7% in 2008 as wider availability and a better selection of brands and products encourage more men to try out new products.
In 2008 retail growth will slow as consumers' disposable income is squeezed by higher mortgage costs, utility prices and transport costs. Combined with a slowdown in the housing market and lower consumer confidence, people are deferring expenditure on big ticket items and home improvement projects, which Verdict forecasts will leave total retail growth at just 2.8% for the year.
Nevertheless, Verdict forecasts health & beauty market growth to increase, aided by people trading up to more expensive products in categories such as skincare. Indeed, with many consumers holding back from big ticket expenditures, there is room in the consumer purse for a greater proportion of smaller luxury purchases. As many premium beauty products claim improved benefits, yet are still relatively low cost, they are easier purchases for consumers to justify and are well placed to grow in 2008 and beyond.
"In uncertain times people are still willing to spend money on making themselves look good and feel good," says Carol Ratcliffe, Retail Analyst at Verdict Research and author of the report. "If you're holding back from buying expensive items, there is more scope for smaller indulgences. Health & beauty products are ideal for this: it doesn't cost much to treat yourself and even premium brands are relatively accessible."
Price inflation is another important factor following a year of rising raw material, manufacturing and transportation costs. Verdict expects these higher costs to be partly passed on to consumers in the majority of beauty categories, with inflation peaking in 2008 across the market as a whole.
"Higher prices won't put people off buying health & beauty items," adds Ratcliffe. "Most of these products are seen as essential so the majority of people will be spending more this year on health & beauty - even if they aren't interested in more advanced products."