Kline study shows consumers opting for competitively priced cosmetics, toiletries

LITTLE FALLS, N.J. Consumers are opting for competitively priced cosmetics and toiletries from the mass market and direct trade, thereby hampering sales of premium products. This has resulted in market growth of only 0.3% in 2008 in the United States — the lowest since 1991, according to a recent study by research and consulting firm Kline & Co.

According to Kline, sales have reached a total of $35.6 billion at the manufacturers' level, but consumer concerns about the recession may ensure that these levels do not rise higher during 2009-­2010.

"The new frugal mindset imposed by the recession has altered spending and product consumption habits, some of which will probably continue into the foreseeable future," stated Nancy Mills, industry manager, consumer products practice, at Kline. "Many people have traded down on certain products, and as they get accustomed to buying some lower-priced or private-label products, and shop more in the lower-priced channels, they might well continue with those habits after the tough times have subsided. To be successful, companies will likely continue to infuse the mass segment with more sophisticated products to compete with luxury products."