This morning (January 20th), the Office for National Statistics reported that retail sales volumes have fallen by 1%, coming in below economic forecasts. Despite this, mass and prestige beauty brands continue to report festive success stories

Before the festive period, a Reuters poll of economists forecasted a 0.5 per cent rise in retail sales volumes despite many hurdles facing shoppers. This morning, the ONS released disappointing figures which point to a marked fall in retail performance. 

In a release, the ONS states: ‘Retail sales values, unadjusted for price changes, fell by 1.2% in December 2022, following a rise of 0.5% in November 2022. When compared with the pre-coronavirus (COVID-19) level in February 2020, total retail sales were 13.6% higher in value terms, but volumes were 1.7% lower.’ 

The proportion of online sales fell to 25.4% in December from 25.9% in November, which some retailers are putting down to the Royal Mail strikes which occurred for 10 days between the 9th and 25th of December.  

Whilst food store sales volumes fell by 0.3% in the final month of 2022, non-food sales volumes dropped by 2.1%. This proves that the cost-of-living crisis is taking its toll on consumers, who were less willing to spend on gifting. 

Despite these results, the NPD Group notes that all prestige beauty categories finished in positive growth vs LY for the month, with makeup recording the strongest performance. And, total prestige beauty remains in positive growth in comparison to last year, citing a 14% uplift. 

On this UK Senior Account Manager, Emma Fishwick, says: ‘We continued to anniversarize the omicron variant disruption of December 2021, but in 2022 we had other challenges including but not limited to covid and flu circulating, snow chaos and freezing temperatures in addition to rail and mail strikes. Despite this, growth in both units and the average price has helped Prestige Beauty finish in double-digit growth.’ 

When analysing these figures, it is important to factor in the inflationary effect of the rising cost of energy and resource demand on beauty. Currently, UK inflation is sitting at 9.2%. This means, whilst the figures show positive growth it could be down to the rising cost of beauty products for consumers.

That said, Superdrug has reported strong Christmas sales with like-for-like sales up 16.0% for the five weeks ending 31st December 2022. This has been put down to the brand’s investment into in-store experience and its focus on focus on affordability, resulting in a 20% December sales rise for Own Brand offerings. 

The Perfume Shop, Boots and NEXT also all report success over the festive period, providing some relief for retail.