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Toiletries Market Report Plus 2005
Key Note Publications Ltd, June 2005
This report on toiletries covers a wide range of goods including skincare and hair-care products, personal wash products (such as shower gels and soap), oral care products and shaving preparations. Combined retail sales of these products were worth nearly £3.78bn in 2004, having increased by 5.2% from the previous year. The UK's overall trade balance in toiletries remains positive. In only three product categories — skincare, bath salts and soap — did the cost of imports exceed the value of exports in 2003.
Most sectors of the toiletries market in the UK are mature and competition is therefore intensive and aggressive. This is certainly true of the shaving market, where Wilkinson Sword and Gillette seem to be in continual conflict. Their latest disagreement involves the former's complaint to the Advertising Standards Authority (ASA) that Gillette's advertising is misleading — complaints that have already been upheld in Australia and Germany. If the ASA agrees, Wilkinson Sword may use the judgement to claim compensation for its resultant loss of sales. Certainly, advertising is of paramount importance in a toiletries market swamped by a confusing plethora of products. Even when a brand is well established, there can be little let-up in its promotion if it is to avoid being overtaken by a higher-profile rival. In fact, main media advertising of toiletries, as covered by this report, cost companies more than £403.9m in 2004. Supermarkets, which have a huge slice of the retail market, have limited shelf space and a drop in sales will cause products to be swiftly and unceremoniously delisted.
Although there are specialist personal care manufacturing companies, such as L'Oréal, at the forefront of the market, the clear market leaders are multinationals Unilever and Procter & Gamble, the diversified interests of which include toiletries. Procter & Gamble's proposed acquisition of Gillette will create a group with annual sales of £32bn, pushing rival Unilever into second place. The merger is expected to significantly reduce costs, but will be at the expense of around 6,000 jobs, or around 4% of the combined global workforce. In common with other UK manufacturing sectors, the exodus of jobs from these shores continues relentlessly, with PZ Cussons being one of the latest to announce that it is to switch production to Thailand and Indonesia. 160 jobs will go when its Imperial Leather soap factory in Nottingham closes in 2007.
Most of the product sectors covered in this report are regarded as necessities in the majority of UK households and penetration levels are accordingly high. If they cannot increase demand, manufacturers must concentrate efforts on product innovation and persuading consumers to trade up to premium-priced products. In an ageing population, there is particular scope to increase sales of anti-ageing products, which frequently carry hefty pricetags, despite cynics questioning their claimed properties. However, as well as an ageing population, the UK also has a growing population, which will increase volume demand. This report predicts that UK retail sales of toiletries will continue to show a steady annual increase in value, growing by more than 16% between 2005 and 2009.
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