Cosmetic and Beauty Supply Stores NAICS 456120

May 13, 2025 - Slower Growth Projected

• Sales for the US cosmetic and beauty supply stores industry are projected to grow at a CAGR of 3.38% between 2025 and 2029, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is slower than the overall economy‘s anticipated growth. The retail and wholesale sectors are driven by consumer spending, along with expenditure by businesses and the government. The forecast said retail spending could soften with the growth of spending on consumer services. A factor that may limit consumer spending is higher tariffs on consumer goods. On a positive note, lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. Real income could suffer to an extent if average prices rise due to tariff implementation.
• According to a new survey in Retail Brew, annual beauty spending by female teens increased 10% in 2025 year over year to a peak of $374. Piper Sandler’s semi-annual Taking Stock With Teens survey polled 6,455 teens in 43 states about their beauty spending habits. The top beauty destinations for teens were Sephora, Ulta, Bath & Body Works, Target, and Amazon. TikTok has become an important beauty source for teens, and it entered the top 10 beauty destinations for the first time in 2025. About half of female teens have beauty loyalty memberships. Teens often opt to shop in store for first-time purchases, while they will replenish products online. Favorite cosmetic brands for teens were E.l.f., Rare Beauty, and Maybelline, while top fragrance brands were Bath & Body Works, Sol de Janeiro, and Victoria’s Secret.

• Cosmetics and beauty supply stores are preparing for potentially disruptive ramifications of a range of tariffs on goods from China, Canada, and Mexico introduced by the Trump Administration. According to Vogue Business, the tariffs could create ripples across the beauty industry, disrupting delicate supply chains and driving up the cost of globally sourced products. Per the report, “Rising production costs driven by tariffs, meanwhile, could erode margins, inflate retail prices and diminish consumer demand. Globally, the tariff climate remains volatile, with looming hikes across multiple markets threatening to exacerbate these issues.” Anna May of NielsenIQ’s Beauty Vertical said the top personal care categories exposed to tariffs are cosmetics, bath and shower, and oral care. Ulta’s Chief Marketing Officer Kelly Mahoney told Marketing Brew that the company is monitoring tariffs, economic uncertainty, and lower consumer confidence. She noted the company is partnering with its brand and operations partners to mitigate risks.
• According to a report in CFO Dive, consumer sentiment, an indicator of discretionary spending, fell in large part due to tariff uncertainty and an expectation of higher prices. The final index of consumer sentiment from the University of Michigan dropped 8% in April 2025 from the previous month. An index measuring consumers’ expectations for the future fell nearly a third since January, the steepest three-month percentage decline since the 1990 recession. According to survey director Joanne Hsu, “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.”