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Editor: Jane Griffiths
ISBN: 1-84168-126-1

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EXECUTIVE SUMMARY

The UK toiletries market grew by 3.3 percent in 1999, to around £3.42bn. For the purposes of this report, Key Note defines the market as covering personal wash and bathroom toiletries, haircare products, skincare products, oral care products, and shaving products and men’s toiletries. The largest product sector in value terms is that of personal wash and bathroom toiletries, but the highest growth in 1999 came from shaving products.

The toiletries market is characterised by growing maturity and fierce competition between the leading branded manufacturers. There is also increasing pressure from the major grocery retailers, which have expanded significantly in the health and beauty market in recent years. Aggressive price competition at retail level has dampened volume growth in the toiletries market over the past year, but value sales have been sustained by consumers trading up to more sophisticated, premium products that offer additional benefits such as aromatherapy and anti-ageing properties.

The underlying trend is towards natural ingredients, with a growing interest in herbal and non-traditional medicines. There is also growing polarisation between the mass-market and specialised designer products, reflecting the move towards a more fashion-oriented industry. The customer base has expanded greatly in recent years, as more men and younger children are using toiletry products, with manufacturers introducing a wide range of products specially formulated for them.

The past year has seen Boots experimenting with a number of men’s salons dedicated to male grooming, health and fitness, and offering services such as manicures, massages, facials and hair styling. Elida Fabergé has also followed suit, with the opening of a men’s hair salon in Oxford Street in October 2000, and a nationwide chain being planned over the next 3 years. Increasing consolidation of the cosmetics and toiletries industry is also continuing, with many of the leading global players embarking on major restructuring programmes.

In July 2000, Smith and Nephew sold off its Consumer Goods division — which includes established toiletry brands such as Simple and Nivea — to a management buyout (MBO). Meanwhile, The Body Shop decided to move out of manufacturing with the disposal of its plant at Littlehampton. The most important development is the merger of SmithKline Beecham with GlaxoWellcome, to form Glaxo SmithKline. The latter will be one of the world’s largest pharmaceutical companies, with a combined turnover of around £16bn.

The outlook for the UK toiletries market remains positive. With consumers’ enduring enthusiasm for personal care products, new and exciting opportunities will be presented, ensuring the ongoing success of the toiletries market. Key Note forecasts that, over the period from 2000 to 2004, the toiletries market will increase by 30.1 percent to reach £4.75bn.

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Text © 2000 Key Note

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Last updated by Jacob van Eldik 21th November 2000