US cosmetics prices rose in August by the most in almost 16 years as a return to office and social functions keeps demand resilient in the face of inflationary pressures.
Prices for makeup, perfume, bath and nail products rose 2.3% in August from a month earlier, the largest increase since December 2006. Compared with a year ago, prices in the category were up 4.2%, the largest increase since 2009.
Beauty was the only retail category that grew on a unit sales basis between late July 2021 and this year, according to data from NPD Group. While other discretionary products have seen flagging demand as consumers grapple with higher food and gas costs, beauty has maintained solid growth, both because cosmetics products need to be refilled and because many Americans are spending more time away from home. That demand has allowed companies to continue to raise prices while maintaining higher sales volumes.
Coty Inc., which owns brands including Covergirl and Sally Hansen, said late last month that it’s rolling out another round of price increases and so far there hasn’t been an impact on unit sales.
“The beauty category is not showing any sign of slowdown,” Coty Chief Executive Officer Sue Nabi said on an earnings call.
In addition to resilient demand, operating margins in beauty “appear least pressured, with low commodities exposure, limited freight costs and innovation to lift sales, particularly for premium brands,” according to a report from Bloomberg Intelligence analysts Deborah Aitken and Andrea Ferdinando Leggieri.
By Olivia Rockeman
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