How is inflation affecting the cost of beauty products?

31 Oct 2022

As of 19th October 2022, inflation in the UK has hit record heights at 10.1%. How is this affecting beauty?

Let’s cut to the chase – over the last year, the price of shampoo has risen by 8% and the cost of shower gel by 11%. And, as inflation increases to more than 8% over the Bank of England’s target, the price tags on day-to-day beauty products are set to rise even more.

We have zoomed in on the last three months of data from the Office for National Statistics (ONS) and the news doesn’t get any better. Measuring the fluctuating unit price of shampoo, deodorant, moisturiser and toothpaste from July to September, the cost jumps are similar.

Three months ago, the average consumer price of an everyday face moisturiser was £7.22, now its £8.02 – an 11% rise. What’s more, deodorant has risen by 17p which equates to an 8% increase.

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Although these increases may not seem too detrimental on paper, the rising cost of everyday items will continue to add up for customers.

What is causing inflation?

It’s not just beauty that is being hit by inflation. On top of housing and bills, food and non-alcoholic beverages have also seen large cost increases. Here’s why…

The UK, and its European neighbours, are witnessing sky-high inflation due to the rising cost of energy and food as a consequence of the war in Ukraine. Not only is this directly affecting the consumer it is also making it more costly for businesses to create and maintain their products and services. Both of these things are inevitably resulting in many business owners passing increased costs to their consumers.

On top of this, some employers are finding it difficult to fill vacancies.

In fact, in June to August 2022, vacancies were 470,000 (59.1%) above the January to March 2020 pre-coronavirus levels. This means higher wages are becoming key for attracting applicants.

Why and how is beauty being affected?

There’s no denying it, the beauty industry is resilient in times of economic troubles. However, there is emerging data to suggest that consumers are willing to bypass their personal care purchases to save cash.

A recent survey by UpCircle and YouGov confirmed this shift. It found that one in five people in the UK are worried about being able to afford skincare products due to the cost-of-living crisis, while one in four have either decreased spending or stopped purchasing skincare products entirely. The eco-conscious brand also shares that one-third of respondents sacrificed or have considered sacrificing their ethics and values when buying skincare.

What’s more, the NPD Group’s most recent research shows that unit sales of prestige make-up products declined 20% from January to the end of August 2022, compared to the same period in 2019.

Is it all bad?

Speaking exclusively to the British Beauty Council Emma Fishwick, Account Manager at NPD UK Beauty says: ‘September traditionally is a big month in beauty helped by gift sets landing in stores, exciting innovation launching, especially in the fragrance category and the change in season resulting in some consumers re-evaluating their skincare and make-up routine. As a result, both Bricks and Mortar and E-commerce were in growth for the month.’

However, it’s important to remember that this growth ‘is largely driven by an increase in average price’.