NPD Group: Sales decline in U.S. prestige beauty category

PORT WASHINGTON, N.Y. The U.S. prestige beauty industry posted a 7% decline in the first half of the year, according to The NPD Group, indicating that consumers are still cautious and willing to spend money only on those items they find personally meaningful or worthy of the investment.

Sales of U.S. prestige beauty dropped 7% to $3.7 billion during the first half of 2009, with June 2009 marking the 11th consecutive month of negative prestige beauty performance.

Prestige fragrance took a major hit during the first half of the year with sales declining 10% to $1 billion,compared with the year-ago period. Both women’s and men’s prestige fragrances posted 10% declines from a year-ago, The NPD Group stated.

U.S. prestige skin care suffered the worst first half for skin care in the past three years but still had the softest losses of all beauty categories in terms of both dollars and units. Sales of U.S. prestige skin care dropped 6% to $1.2 billion.

Set & kits and hair were the only segments to show positive dollar growth in the first half of 2009 with set & kits up 8% in dollars and 8% in units.

Hair, although modest, had an increase of 1% in dollars and 4% in units. Face, body and sun experienced a weak first half, down in both dollars and units.

Facial moisturizer sales, which accounted for nearly one-fourth of new products sales in the first half of 2009, posted a dollar increase of 2%.

Meanwhile, makeup sales in U.S. department stores totaled $1.5 billion, down 7% in dollars, compared with the year-ago period. All segments (face, eye, lip, gift sets, other color and nail) posted declines ranging from 3% to 20%, according to NPD Group.

While overall new launch makeup dollar volume dipped 7%, new makeup face product sales grew in both dollar and unit volume, led by double-digit increases in foundation, blush, concealer and other face. New mascara sales posted an increase of 4% and new lip color sales soared 47%.