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U.S. beauty market could decline by 2.5%, the steepest drop ever

According to Kline, the USD 75 billion U.S. cosmetics and toiletries market is on track to experience the sharpest decline ever recorded since the World War II, due to the COVID-10 pandemic.

New forecasts, published by the market research firm in a special report on the topic [1], indicate a decline of 2.5% in 2020 as the most likely outcome, with the best-case scenario reflecting a 1.5% gain during the year and the worst-case scenario at an 8.1% drop.

So far, the 0.8% drop in 2009 during the last recession is the biggest (...)

So far, the 0.8% drop in 2009 during the last recession is the biggest market dip ever reported by Kline. (Photo: © FamVeld / shutterstock.com)

Before the pandemic, Kline expected the US beauty market to grow at an annual growth of 3.8% through 2023.

Such a drop has no precedent. So far, the 0.8% drop in 2009 during the last recession is the biggest market dip ever reported by Kline. The only other time Kline noted a market decrease was a 0.3% falloff in 1991 amid another recession.

Kline’s forecasting analysis clusters beauty categories into four groups:

- Rescue categories, such as hand sanitizers and liquid hand soaps, that will experience spiked levels;
- Everyday basics, like shampoos and deodorants, which consumers are expected to more or less use as usual;
- Soothing solutions, such as facial skin care and nail polishes, which are expected to decline near term but may benefit from consumers turning to them as a treat and/or to maintain or establish a part of their routine they can still control;
- Can-wait categories, including fragrances and colour cosmetics, which are expected to decline sharply during social distancing of the health crisis and continue to suffer during the economic fallout in the years to come.

The cosmetics market will undoubtedly suffer in 2020 and in the years to come, but we expect it to recover within three to five years as it has in all past recessions,” commented Carrie Mellage, Vice President of Kline’s Consumer Products Practice. “Compared to other industries, the beauty market is fairly recession-proof, and its products will continue to be desired by consumers - both for meeting basic needs as well as an indulgence.

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