UK Health & Beauty Sector Report | Insight & Data
UK Health & Beauty Sector Report : August 2021Access report with a free trial subscription
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Period covered: 03 January – 30 January 2021
Note: Reporting periods are either one month or two months behind the current month as standard.
January blues and Covid mutations
- The national lockdown from 5 January and fears around Covid mutations took its toll on Health & Beauty sales in January, with sales plunging 15.9% year-on-year.
- Health & Beauty sales have been in decline since March 2020 as restrictions disrupt beauty regimes and normal patterns of spending on health.
- Importantly however, consumers are adapting quickly to changes in restrictions, and retailers that can adjust to their behaviour have benefited.
- Pureplays have seen sales surge as consumers shift some spend online.
- The 2.3% decline in total January retail sales marks the steepest decline since May last year as England entered a third national lockdown.
- Although January blues and fears around Covid-19 mutations choked spending, shopping online and the ability to offer click-and-collect delivery softened the impact of mandated physical store closures.
- Online sales soared by 75.1% year-on-year in January, to account for a record 36.3% of total retail sales.
Permanent vs temporary shifts
- Online spending over the past year saved many non-essential retailers facing store closures during lockdowns. But with some retailers increasing investment online, questions remain over whether shoppers will flock back to stores.
- The verdict is split. Around a third of consumers believe their habits will not return to pre-Covid shopping, having overcome barriers of trust and setting up accounts online.
- However, another third of consumers are hoping to return to previous pre-pandemic habits.
- This is likely to see the rampant pace of online cool when restrictions ease.
Releasing savings in 2021
- Fewer expenses under Covid-19 restrictions has led to a boost in disposable incomes, particularly for affluent households with higher job security.
- But even average UK households have potentially accumulated £1,266 per month in extra savings. Propensity to spend will partially be driven by perceptions around the duration of the virus.
- Retail Economics research shows almost two in five consumers (38%) think that their lives will return to normal by June 2021. However, 35% believe it will take more than a year for their lives to return to normal.
January declines less severe than during first lockdownSource: Retail Economics