The UK market is expected to be worth $16.5bn by the end of 2018, up 3.7% from the year before.
This growth has been driven by consumer spending, but some brands are beginning to see their sales fall as consumers become more cautious about spending, according to research from the market research firm IHS Markit.
“A lot of the growth in UK consumer spending has been attributed to a number of factors, including a rise in uncertainty over Brexit and the uncertainty over the economy,” said Simon Goulson, head of global retail research at IHS.
“In particular, we are seeing a shift in people’s attitudes towards purchasing from the point of view of buying things that can be delivered within a reasonable timeframe, as opposed to the purchase that is about buying things for a lifetime.”
One of the most popular brands for consumers is the popular beauty brand L’Oreal, which has enjoyed strong sales in recent months.
“The UK is a leading market for L’Os face products,” said Paul Haggis, senior vice president of sales and marketing at L’Ocean.
“Our customer base is growing in the UK.
They’re now buying over 60% of our face products.”
L’Oréal has been among the UK’s biggest sellers of cosmetics for some time, with sales up by over a quarter in the first half of this year.
However, it has struggled to attract consumers in the run-up to Brexit, and the company is not yet in a position to compete with rival brands in the global market for cosmetics.
The company has been trying to appeal to younger customers with its ‘Make Up for Less’ campaign, which offers low prices and free samples, but it has yet to see a significant uptake in the face market.
“This is something that is still a little bit early to tell,” said Haggas.
“But we think that there are a number people who are really looking to try L’Orange and L’Rosa.
The other brands that are doing really well are the ones that have really focused on the consumer experience, and that is the brands that you’re going to see in the cosmetics category.”
Another success story is the cosmetics giant Estée Lauder.
The cosmetics giant has been one of the UKs biggest sellers for a number the years leading up to Brexit.
EstéeLion, the company’s flagship brand, has been in the news a lot recently, as the company faced criticism over the way it has been promoting its products in the lead-up.
The retailer is also facing a number other problems, as it struggles to keep up with the changing consumer behaviour.
However its sales are expected to grow at a rate of more than 2% this year, and it has also been able to grow its presence in the market by offering its products for a discounted price.
“We have done well to build a good brand, and have done a good job in that, and are now in a good position to grow,” said Goulsons boss.
“It’s really exciting times for us in terms of growth and success for Estée.”
The latest IHS forecasts that UK sales will grow by 3.1% in 2019, but this will be down from 4.5% growth in 2018.
“Overall, UK retail is still struggling with the uncertainty around Brexit and uncertainty over its economy and the economic outlook,” said Mr Haggs.
“Although we are not seeing an immediate decline in UK sales, this is still well below the average growth rate in the past several years, and this could continue into the next year.”
For now, the UK market looks like it will continue to be a growth market for brands, with the retail sector’s annual growth rate increasing by 2.5%.
“The consumer spending in the U.K. is very strong, and a lot of this is due to the rise in the consumer confidence that has seen growth in the stock market,” said IHS’s Goul.
“With so much of the market now focused on cosmetics, and with consumers being more cautious, we expect that growth to continue for the next couple of years.”
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