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The Market for Cosmetics and Toiletries in USA
Euromonitor International, July 2004
Cosmetics and toiletries sales stall in 2003, up only 0.7%
While overall GDP growth in the US finally picked up in the second half of 2003, many consumers have yet to feel its salutary effects. Concerns over a persistently weak labour market prompted many to spend more warily, as consumer confidence remained low. As a result, in 2003, retail sales of cosmetics and toiletries grew by just 0.7% in current value terms. The economic prosperity of the late 1990s has been followed by a mild recession and a subsequent sluggish recovery, and continues to be plagued rising budget deficits and lacklustre job creation. Prolonged weakness in the labour market has many US consumers still unnerved by what some have dubbed the “jobless recovery”.
Metrosexuals benefit men’s grooming
A true bright spot within cosmetics and toiletries has been retail sales of men’s grooming products. Between 1998 and 2003, current retail value gains topped 37%. The strong sales performance stemmed primarily from an influx of new product launches in nearly all men’s grooming areas, as well as men’s growing acceptance of the importance of being well groomed.
The launch of new, more expensive deodorant body sprays helped revive sales in a sector once thought to be mature. In addition, new mass-market brands such as Beiersdorf Inc’s Nivea for Men and Johnson & Johnson subsidiary Neutrogena Corp’s Neutrogena for Men aimed at men helped generate value by creating a middle ground between expensive, premium men’s brands, typically found in department stores and speciality shops, and cheaper, mass-market products for basic, everyday men’s grooming, like shaving products. The success of the US television make-over show, “Queer Eye for the Straight Guy” which popularized the term “metrosexual” and educated men on the finer points of personal style also served to boost sales of men’s grooming products.
Procter & Gamble Co leader
Market leader Procter & Gamble became an even bigger player in the US cosmetics and toiletries market through its September 2003 acquisition of German hair care maker Wella AG. Wella is renowned for its salon and professional care brands, a product area which Procter & Gamble has lacked. Wella also expands Procter & Gamble’s reach into international markets, allowing it to compete with global leader L’Oréal Group in nearly every product segment and price bracket.
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