Economic situation for Beauty and personal care supermarkets
I will talk about the beauty and personal care super markets. They have been perfoming well in the past but have faced challenge in the past year. A poor economic situation limited the performance of beauty and personal care, with sales dropping almost 1% in current value terms in 2010. There is consensus that in order to save money, Spaniards are reducing expenditure on non-essential goods. However, the fact that most beauty and personal care products are part of consumers’ daily hygiene routine has resulted in a general switch from high-price references to cheaper alternatives.
Spanish beauty and personal care consumers are traditionally highly brand-sensitive, with demand for private label products growing exponentially over the review period. The economic boom during the first part of the review period has helped boost demand for premium and imported products. However, the poor economic situation has resulted in consumers buying those products, which show a better value for money ratio. This has clearly benefited the performance of private label products.
Over 2010 the economic crisis affected most players in the Spanish beauty and personal care market, as consumers increasingly switched from branded references to private label products. As a consequence, most manufacturers lost ground to private label distributors, especially Mercadona. This company keeps gaining ground in the Spanish market due to its beauty care line Deliplus and has benefited from the situation
Although the Spanish economy stood out of the recession in 2010, there have been two variables which have affected recovery over the forecast period. First, the high level of public deficit has resulted in the government taking measures which are reducing average disposable income – such as the increase in taxes or the drop in public servants’ wages. Secondly, high unemployment has resulted in Spaniards saving more instead of spending. This has resulted in saving money by substituting branded references for private label products in order to save money. This has greatly affected the perfomance of the supermarket.
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28 Nov 2011
por
Tabithah Mkandawire Kaluwa
IMSD /
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