Released on: September 5, 2007, 4:13 am

Press Release Author: Bharat Book Bureau

Industry: Consumer Services

Press Release Summary: Value growth in the sector of decorative cosmetics was
hampered by a slight downturn in sales of cosmetics other than face make-up, sales
of which had increased.

Press Release Body: Bharat Book Bureau, a leading market information aggregator has
put forth a report- Cosmetics & Fragrances Market Report Plus 2007
\"http://www.bharatbook.com/detail.asp?id=9986\"

Retail sales of cosmetics and fragrances, as covered by this report, increased in
value by 5.1% between 2005 and 2006, with fragrances showing the stronger growth.
Value growth in the sector of decorative cosmetics was hampered by a slight downturn
in sales of cosmetics other than face make-up, sales of which had increased. Growth
in expenditure on most consumer goods, particularly that on luxury goods, slowed
significantly as recent interest rate rises have taken the base rate to the highest
level in 6 years, amid concerns over inflation. It is anticipated that value growth
in the coming years will be modest since figures from National Statistics confirm
that expenditure on beauty products and treatments is discretionary and tied in with
disposable income; the 10% of households in the lowest gross income group spend a
weekly average of just £3.50 compared with those in the highest income group who
spent an average of £19.40 in 2005/2006.

However, percentage penetration of cosmetic products and fragrances is high, with a
survey undertaken for this report revealing that 89.7% of women used fragrances and
80.4% use lipsticks. Younger respondents tend to use products more than older
respondents so, ostensibly, the UK\'s ageing population does not bode well for the
industry. It is a fact, nevertheless, that older people maintain a pride in their
appearance and frequently have the disposable income to indulge in premium products.
Another demographic influence on the future of the cosmetics industry is the growth
of the minority ethnic population so companies are increasingly expanding their
ranges to suit different skin textures and colourings. Such personal care
manufacturing companies at the forefront of developing this market include L\'Oréal
and Avon, and the diversified multinationals, Unilever and Procter & Gamble.

Although the UK has a trade deficit in fragrances and cosmetic products, it is one
that, in contrast to previous years, decreased from 2004 to 2005 as the value of
exported goods increased at a faster rate than the value of imported goods.
Principal trading partners are France, Germany, the Republic of Ireland, Italy,
Spain and the Netherlands.

According to the European trade association, COLIPA, the European cosmetics industry
consists of around 4,000 manufacturers, mostly small and medium-sized enterprises,
which create employment - directly and indirectly - for more than 350,000 Europeans.
In common with other markets, the European cosmetics and fragrances industry, on
both the manufacturing and retailing sides, has its sights on expansion in the
developing markets of Asia, Eastern Europe and Russia, and South America. For
example, The Body Shop saw comparable store sales in Malaysia and Indonesia both
growing by 17% in its financial year ending 25th February 2006. While Eastern Europe
may still represent a small region for the industry, it is one with great potential
in which to increase sales, particularly in Poland, the Czech Republic, Hungary and
Slovakia.

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