Mathilde Lion - The yellow jackets movement in France and its consequences are not the only reasons for this situation, since we were already last year on a -1% trend. The overall context is no help to favour an upturn in consumption recovery, particularly in the Prestige segment, and this trend can be observed across other sectors. Cosmetic products and fragrances are not basic necessities, allowing consumers to make choices in their budget allocation. Overall, for budgetary or ecological reasons, the trend is towards a more careful or rational consumption.
Premium Beauty News - Is there a transfer of selective sales to other channels?
Mathilde Lion - Our study covers sales of prestige brands in selective, excluding Private Labels and exclusive brands, as well as on-line sales through e-retail sales of perfumeries and department stores and of some pure players. It is true that on-line sales are continuing to progress with a 17% increase in 2018, it is a significant growth driver but which does not compensate losses in outlets.
There are also more and more online players who offer Prestige brands, be they specialists like Notino or Look Fantastic, discounters like Beauté Privée or generalists like Amazon. This offers new alternatives to consumers. To this must be added the development of own sales by brands via their websites or the expansion of their network of owned outlets. All this represents as many possibilities versus purchases performed in perfumeries and department stores.
Premium Beauty News - These figures do not take into account retail brands or exclusive brands, does that change the picture?
Mathilde Lion - Indeed, by looking at the results for other countries where we also introduce these brand profiles, we noticed a strong development of these specific brands in the medium term. In that regard, we could therefore consider that Prestige finally, is doing pretty well. However, in the UK for example, where exclusive sales and Private Labels acted as a major growth engine, this was no longer the case this year either.
Premium Beauty News - What are the most impacted categories?
Mathilde Lion - Make-up is at -4%, perfume at -2% and personal care at -1%. Overall, there is a cross-over trend between make-up and personal care with a strong slowdown for make-up with sales estimated to 440 million euros for 2018. It is the smallest category in terms of sales in the selective circuit dominated to the two thirds by perfumes. However, it concerns Prestige traditional brands and not exclusive house brands, very popular in this category.
Moreover, the emergent category of applicators for the face, and the lips, is recording good results.
Premium Beauty News - Is this decline in selective specific to France?
Mathilde Lion - Our studies cover Europe, the UK, Spain, Italy and very soon Germany. Overall, the French market is indeed the one where sales in value were down the most. UK was an important growth driver, but for other reasons, it slowed down significantly in 2018 with less than 1% in value. Conversely, Southern Europe continues to perform well with +4% in Spain and +3% in Italy.
Premium Beauty News - How did end of year sales do?
Mathilde Lion - The Black Friday week was very positive, but then the momentum slowed down significantly for the reasons we know. The last few months of the year have weighed significantly in the overall drop because they are the busiest months of the year, yet sales did not stall that much during that period. For example, the Paris region managed to stay afloat better than other regions despite store closings every Saturday. Parisians organized themselves differently.
Premium Beauty News - What are your forecasts for 2019?
Mathilde Lion - The trend will continue, we expect a similar drop of around 2%, more or less for the same reasons. There is no major restructuring underway that could change the game play and it is true that household confidence is currently at its lowest level.