Karen Grant, The NPD Group

Sales of prestige brands, those sold primarily in department stores, showed an increase of seven percent in dollar sales in 2012 compared to 2011, said The NPD Group. The US market thus performed much better than the European one, where sales declined in France (-1%), in Italy (-4%) and in Spain (-7%) and progressed by 5% in the United Kingdom.

Coming off the wave of 2011, one of the most robust sales periods in over a decade for the beauty industry, 2012 has shown some great highs, along with some modest lows,” said Karen Grant, vice president and senior global industry analyst, The NPD Group.

According to the market research firm, all of the U.S. prestige beauty categories posted healthy growth. Prestige skincare sold in U.S. department stores generated the largest growth at 10 percent, followed by makeup at seven percent and fragrance at five percent, compared to 2011.

Even though consumer confidence continues to waver, there is momentum at both ends of the price and product spectrum. In 2012, along with smaller categories in beauty, we are seeing investment spending on premium-priced makeup, skincare, fragrance, as well as premium-priced sets, which lead in growth once again. Even in Europe, where the economic environment is more challenging, the major premium-priced category, fragrance, was positive. Premium-priced products remain one of the brightest spots in beauty and will continue to carve out market share across all categories and geographies in the New Year,” said Grant.

Lower performance for mass brands

In comparison, the U.S. Food/Drug/Mass [1] channel recorded a lower growth, recording nearly a three percent increase in sales for total beauty in 2012, versus 2011. Mass makeup sales posted the biggest increase at five percent, followed by skincare at three percent, while fragrance sales declined four percent in dollar sales, compared to 2011.

Furthermore, in National Chain [2] stores, fragrance sales grew seven percent, reported The NPD Group.

In the U.S., although we have seen some tempering in sales performance, compared to 2011, growth remains positive for both the prestige and mass channels. The trend of prestige beauty outpacing mass beauty continues to be evident since the recessionary period of 2009 and will likely continue into 2013,” ended Grant.