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  • 1. THINK RETAIL THINK VERDICT UK Retail Futures 2011 Health and Beauty Forecasting Report - Published February 2007 Health and beauty pricing pressures, 2007 • Premium & masstige • Innovation brands • Natural, ethical, • More affluent organic • Advanced own brands • Indulgence • Department stores • Specialists Current Prices • Basic products • Mass-market competition • Value • Own brands expectations • Supermarkets UK Retail Futures 2011: Health and Beauty “Verdict expects the majority of categories to continue experiencing price deflation over the forecast period, although the most pressure is likely to be felt in bathroom toiletries and OTC medicines. Offsetting much, but not all, of the downward pricing pressures is a growing interest in higher priced products. At the more mainstream end of the spectrum, this is being further encouraged by retailers allocating additional shelf-space to value-added products such as niche shampoos and whitening toothbrushes....” www.verdict.co.uk
  • 2. About Verdict Research... Verdict Research has been producing independent retail analysis and comment on the UK retail marketplace for well over 20 years and is regarded as a key source by BBC, ITV and the leading broadsheets including, the FT, Times, Independent and Daily Telegraph. Many leading trade publications also frequently refer to Verdict's opinion and research including Retail Week, DIY Week, Cabinet Maker and The Grocer. Products and services include: • Consumer Research Reports - Furniture and Floorcoverings • Location and Channel Reports - How Britain Shops - Grocery - e-Retail - Where Britain Shops - Health and Beauty - Mail Order Retailing - Consumer Satisfaction Index - Homewares - Neighbourhood Retailing - Consumer Insights Profiles - Menswear - Out of Town Retailing - Pharmacy Retailers - Town Centre Retailing • UK Sector Reports - Value Clothing - Accessories - Womenswear • Retail Futures - Childrenswear - Quarterly Forecasts to 2009 - DIY and Gardening • European Retailing Reports - Annual Forecasts to 2011 - Department Stores - European Clothing Retailers - Electricals Retailers - European Department Stores • Retail News & Comment - Entertainment - European DIY Retailing - Footwear - European Grocery Retailers Verdict Retail Futures 2011 Verdict Retail Futures 2011 reports are designed to provide an accurate UK population 2006 and forecast 2011, by age group and detailed five year forecast for each retail sector. Each report complements Verdict sector reports by providing a detailed market 15 14.3 outlook for the forecast period by analysing a host of economic, social 14 13.3 and political and technological factors that determine demand. In 13 13.0 million 12.4 addition they take account of factors like fashion, changing consumer 12.3 12.0 12 11.8 11.6 preferences and the influence of the media. 11 10.7 10.4 10 The Retail Futures 2011 series of reports provide a complete overview of 0-14 15-29 2006 30-44 45-59 2011 65+ UK retail. It provides 5 year forecasts for 7 retail sectors – clothing and footwear, DIY and gardening, electricals, food & grocery, furniture & Source: UK Retail Futures 2011: Health & Beauty floorcoverings, health & beauty, homewares. "While already commonplace in categories such as OTC, older consumers are increasingly looking for As the only provider of forecasts exclusively for the UK retail more targeted products that cater for specific age- industry, Verdict is uniquely equipped to give thorough and reliable related issues faced at their lifestage - for example in skincare, issues ranging from lacklustre tone and projections and analysis on its future development. firming requirements to more crêpe-like skin as they age. Retailers need to ensure they are stocking products that cater for these changing expectations..."
  • 3. www.verdict.co.uk Companies examined by the Retail Futures 2011 series... HEALTH AND BEAUTY • Office • Magnet • Alliance Pharmacy • Schuh • Furniture Village • Asda • The Shoe Studio Group • Homeform • Avon • Shoe Zone • Carpetright • Body Shop • Shoefayre • Allied Carpets • Boots • Sportsworld • Floors 2 Go • Debenhams • Stead & Simpson • House of Fraser • Stylo DIY AND GARDENING • Lloydspharmacy • B&Q • Morrison ELECTRICALS • Wickes • Sainsbury • Currys • Homebase • Savers • Currys.digital • Home Retail Group • Superdrug • PC World • Focus • Tesco • Comet • Argos • The Perfume Shop • Game • Wilkinson • Jessops • Wyevale CLOTHING AND FOOTWEAR • Argos • Topps Tiles • Arcadia • John Lewis • Bhs HOMEWARES • Debenhams FOOD AND GROCERY • Primark • Gap • Tesco • Matalan • George (Asda) • Asda • B&Q • H&M • Sainsbury • Ikea • House of Fraser • Morrison • John Lewis • JJB Sports • Aldi • Argos • John Lewis • Co-operative Group • Next • Marks & Spencer • Iceland • Debenhams • Matalan • Lidl • Tesco • Mosaic • Netto • Woolworths • New Look • Somerfield Group • Wilkinson • Next • Waitrose • Dunelm • Peacock Group • Marks and Spencer • Primark FURNITURE AND FLOORCOVERINGS • River Island • Argos • Sainsbury • Homebase • Tesco • DFS • TK Maxx • IKEA • Brantano • MFI • C&J Clark • B&Q • Dolcis • Homestyle • Faith • John Lewis • JD • Land of Leather • Kurt Geiger • ScS
  • 4. UK Retail Futures 2011: Health and Beauty The £14.9bn UK health and beauty market offers a large and growing Share of turnover by location 1996, 2001, market for retailers. The market will be worth £17.4bn by 2011, but not all 2006 & 2011 market participants will benefit from this growth. Indeed, with grocers % expected to account for half of all health and beauty sales by 2011, 60 50.4 48.5 50 department store operators, home shopping companies, specialists and 45.7 42.0 40 general retailers all need to improve to simply keep up with market 30 25.6 28.8 31.0 31.9 growth. 20 19.4 17.2 16.5 15.0 11.1 10 5.5 6.8 4.6 UK Retail Futures 2011: Health and Beauty is the first in a series of 0 1996 2001 2006 2011 eight new forecasting reports using Verdict's retail expertise to analyze Neighbourhood Town Centre Out-of-Town Non-store current trends, plans and upcoming developments across seven key retail Source: UK Retail Futures 2011: Health & Beauty sectors to provide in-depth forecasts for the next five years. "The rise of the Internet has resulted in an underperformance among the traditional store-based This new annual forecast report analyses the prospects for each of sector of retail in recent years. This trend is evident the major categories in the health and beauty market to help from sales at physical stores increasing by 15.6%, retailers and investors make informed decisions regarding the future compared to the 17.3% increase in total retail of the UK health and beauty market and its key participants over the expenditure over the past five years. Over the next five years, we expect this trend to accelerate, with store- next five years. based retail underperforming total retail growth by 5.3 percentage points..." Key issues examined in this report... • Pricing pressures. The continued strength of supermarkets and Mass market retailers will come under pressure other value-led channels have prompted several years of price 2007-2011 deflation among basic health and beauty products. The prevalence Premium & Masstige of strong own label products has furthered customer expectations (Higher Margins) of at least one very low price option in all major categories from the major supermarkets Value competition Higher costs prompting deflation • Consumer trends. There is a growing consumer movement towards ethical, natural and organic products. This creates opportunities for Value Market manufacturers and retailers to justify higher price points - because (Higher Volumes) consumers are generally willing to pay slightly more for products Source: UK Retail Futures 2011: Health & Beauty that provide emotional as well as physical benefits. "For retailers, margins are coming under pressure from higher costs - rents, rates, wages and fuel - making a • Mass market retailers. Margins for mass market retailers are facing mass market positioning rather an unpleasant place to pressure from higher costs including rents, rates, wages and fuel. be. Growth in the market is coming from the masstige This is making a mass market positioning rather an unpleasant place and premium sections of the market, which department stores and upmarket specialists are well positioned to to be. Growth is coming from the masstige and premium sections of benefit from..." the market, which department stores and upmarket specialists are well positioned to benefit from.
  • 5. www.verdict.co.uk Sample information from ‘UK Retail Futures 2011: Health and Beauty’ Chapter 3: Key Market Issues Figure 3: Key issues impacting the health & beauty market 2006-2011 Consumer Marketing & Trends Innovation Key Issues Mass Market Pricing To Struggle Pressures Demographic Changes Source: UK Retail Futures 2011: Health and Beauty Demographic changes • The number of people in the UK aged from their mid-40s onwards will jump by 7.5% over the next five years. The growth will be stronger towards the older age groups with a particular rise in the 65+ category, which will increase by 10.0%. The overall ageing of the population profile will have a positive impact on a number of categories: particularly OTC healthcare, skincare, dentalcare and vitamins & minerals (which fall under the Other category). • While already commonplace in categories such as OTC, older consumers are increasingly looking for more targeted products that cater for specific age-related issues faced at their lifestage - for example in skincare, issues ranging from lacklustre tone and firming requirements to more crêpe-like skin as they age. Retailers need to ensure they are stocking products that cater for these changing expectations. • Based on projections from the UK Government Actuary department, the number of infants in England aged 0-2 has been rising, but is set to fall marginally in 2007. This decline is forecast to continue to 2010, with the number of infants falling 1.6% over this time, before picking up again in 2011. If, as expected, this pattern is mirrored across the UK, this will limit the potential growth of babycare market volumes. The babycare market will instead be reliant on higher value products to drive growth. Order this report today to find out more...
  • 6. Table of Contents from ‘UK Retail Futures 2011: Health and Beauty’ CHAPTER 1: EXECUTIVE SUMMARY • GDP, Earnings & Disposable Income, Employment, • Key Findings Inflation, Exchange Rates, Interest Rates, Savings Ratio, • Main Conclusions Consumer Debt, Equities, House Price Inflation, Mortgage Equity Withdrawal, Housing Transactions : CHAPTER 2: FORECAST SUMMARY - How does it affect retail? • Expenditure Summary - What’s happened? • Specialists Summary - What will happen? CHAPTER 3: KEY MARKET ISSUES CHAPTER 8: UK RETAILING FORECASTS 1996-2011 • Market Drivers • Key Indicators - Demographic changes • Retail Expenditure - Consumer Trends – More Trading Up, More Men and • Sales by Location More Self-medication • Sources of Growth - Pricing Pressures • Store Numbers by Location - Mass Market to Struggle • Space by Location - Innovation & Marketing • Sales Density by Location • Action Points • Average Store Size • Average Store Sales CHAPTER 4: HEALTH & BEAUTY SPECIALISTS OUTLOOK • Retail Sales CHAPTER 9: GLOSSARY • Store Numbers • Terminology • Space Growth • Sector Definition • Sales Densities • Location Definitions - Town Centre CHAPTER 5: CHANNELS OF DISTRIBUTION - Out-of-town • Sales & Spending - Neighbourhood • Forecast Changes for Major Channels - Non-store Retail • Health & Beauty Market Shares • Forecasting Methodology • Abbreviations CHAPTER 6: CATEGORY FORECASTS • Expenditure Summary TABLES • Expenditure Analysis • Health & beauty summary data – expenditure 2001, • Market Growth 2006 & 2011 • Babycare Products • Health & beauty summary data – specialists sales 2001, • Bathroom Toiletries 2006 & 2011 • Cosmetics • All sales through health & beauty specialists 1996-2011 • Dentalcare • Sources of growth for health & beauty specialists • Haircare 1996-2011 • Men’s Toiletries • Total selling space for health & beauty specialists • OTC Medicines 1996-2011 • Paper Products • Retailers' share of the health & beauty market 2001-2006e • Perfumes • Health & beauty expenditure summary 2001, 2006 & 2011 • Skincare • Health & beauty category analysis 2006-2011 • Other Health & Beauty • Total health & beauty expenditure 1996-2011 • Babycare expenditure 1996-2011 CHAPTER 7: UK ECONOMIC FORECASTS • Bathroom toiletries expenditure 1996-2011 • Key Messages • Cosmetics expenditure 1996-2011
  • 7. www.verdict.co.uk Table of Contents (Contd.) TABLES (Contd.) 2001-2006e • Dentalcare expenditure 1996-2011 • Health & beauty category growth rates 2001-2006 & • Haircare expenditure 1996-2011 2006-2011 • Men’s toiletries expenditure 1996-2011 • Health & beauty principal components of expenditure £m • OTC medicines expenditure 1996-2011 2001, 2006 & 2011 • Paper products expenditure 1996-2011 • Health & beauty expenditure as a % of total spending • Perfumes expenditure 1996-2011 1996-2011 • Skincare expenditure 1996-2011 • Health & beauty expenditure growth at constant (2003) • Other health & beauty expenditure 1996-2011 prices 1996-2011 • Economic drivers for retail 2007 • Babycare expenditure as a % of health & beauty • Measures of inflation 2007 expenditure 1996-2011 • UK retailing forecasts summary 2006-2011 • Babycare expenditure growth at constant (2003) prices • Total consumer retail expenditure 1996-2011 1996-2011 • Forecast chronology 2006-2011 • Bathroom toiletries expenditure as a % of health & beauty • Sales by location 1996-2011 expenditure 1996-2011 • Total UK physical store sales & selling space 1996-2011 • Bathroom toiletries expenditure growth at constant (2003) • Sources of sales growth for physical stores 1996-2011 prices 1996-2011 • Store numbers 1996-2011 • Cosmetics expenditure as a % of health & beauty • Space by location 1996-2011 expenditure 1996-2011 • Sales densities by location at current prices 1996-2011 • Cosmetics expenditure growth at constant (2003) prices • Average store size by location 1996-2011 1996-2011 • Average sales per store by location at current prices 1996- • Dentalcare as a % of health & beauty expenditure 2011 1996-2011 • Health & beauty market definition 2007 • Dentalcare expenditure growth at constant (2003) prices 1996-2011 FIGURES (ABRIDGED) • Haircare expenditure as a % of health & beauty • Health & beauty expenditure growth 1996-2006 and expenditure 1996-2011 forecast to 2011 • Haircare expenditure growth at constant (2003) prices • Health & beauty specialists sales growth 1996-2005 and 1996-2011 forecast to 2011 • Men’s toiletries expenditure as a % of health & beauty • Key issues impacting the health & beauty market expenditure 1996-2011 2006-2011 • Men’s toiletries expenditure growth at constant (2003) • UK population 2006 and forecast 2011, by age group prices 1996-2011 • Health & beauty pricing pressures 2007 • OTC medicines expenditure as a % of health & beauty • Mass market retailers will come under pressure 2007-2011 expenditure 1996-2011 • Health & beauty specialists sales as a % of total retail • OTC medicines expenditure growth at constant (2003) spending 1996-2011 prices 1996-2011 • Health & beauty specialists store numbers 1996-2011 • Paper products expenditure as a % of health & beauty • Space growth for health & beauty specialists 1996-2011 expenditure 1996-2011 • Health & beauty specialists sales densities at current prices • Paper products expenditure growth at constant (2003) 1996-2011 prices 1996-2011 • Health & beauty specialists sales densities at constant • Perfumes as a % of health & beauty expenditure (2003) prices 1996-2011 1996-2011 • Health & beauty channels of distribution 2005, 2006 and • Perfumes expenditure growth at constant (2003) prices 2011 1996-2011 • Changes in shares of health & beauty market 2011 on 2006 • Health & beauty retailers' change in market share
  • 8. Fax to: +44 20 7900 6688 or scan and email to marketing@verdict.co.uk www.verdict.co.uk THINK RETAIL THINK VERDICT *Please refer to our website www.verdict.co.uk for up-to-date prices I would like to order the following report(s): Please enter the title of the report(s) below* Please circle your currency _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ _________________________________________________________________________________________(£/ /$)___________ Complete your contact details: Complete your payment details: Title: Mr/Mrs/Ms First Name Please indicate your preferred currency option: UK£ EUR US$ Last Name Total value of my order is ____________________________ I will forward a check payable to Verdict Research Limited Job Title Please invoice my company (please complete invoice address below) Company I would like to pay by bank transfer (email address required) Address Please debit my credit/charge card: Amex Visa Mastercard Cardholder/invoice address________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ City State/Province __________________________________________________________________________________________________ Country Post Code/ZIP Cardholder Name _________________________________________________________________ Email Address Card No ___________________________________________________________________________ Telephone Number Expiry Date _________ / _________ Fax Number Cardholder/invoicee Signature _____________________________________________________ EU companies (except UK) must supply VAT / BTW / MOMS / MWST / IVA / FPA number : ALL FORMS MUST HAVE A SIGNATURE TO CONFIRM YOUR ORDER: __________________________________________________________________________________________________ Signature Purchase Order Number (if required) _________________________________________ By completing this form you agree that the data in the form will be used for the purpose of processing your order. We may How to contact us: Web Order also use your data to keep you informed of Verdicts’ products and services. As an international organization, Verdict may need to process your data internationally, including in countries which do not have data protection laws, or which have standards lower than the European Union. Verdict, however, seeks to protect your personal data. You have a right to see and Verdict Research Limited, 119 Farringdon Road, London, correct your data by writing to us. Sometimes a fee is payable. For queries about this contact retail@verdict.co.uk. EC1R 3DA, United Kingdom. Please tick the relevant box(es) if you would not like Verdict to contact you by: Post Email Fax Phone Occasionally, our client list is made available to other companies for carefully selected correspondence. Please check here if marketing@verdict.co.uk +44 (0) 20 7551 9750 you do not wish to receive such correspondence by: Post Email This order is subject to our standard terms and conditions, a copy of which is available on request. Registered Office: Verdict Research Limited, Mortimer House, 37-41 Mortimer Street, London, W1T 3JH, United Kingdom UK Registered Number: 1813905