Cosmetic and Beauty Supply Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,400 cosmetic and beauty supply retailers in the US sell cosmetics, perfumes, toiletries, and personal grooming products. Stores may carry a wide selection of products or a limited number of brands or categories. Some stores offer salon services. Full-service or exclusive distributors serve salons and salon professionals by selling “salon-only” or “professional-only” products at wholesale prices. Open-line stores serve retail consumers and salon professionals and carry a mix of products. The industry includes national and regional chains, franchises, and independent operators.
Trends and Fads Drive Demand
Fashion-related trends and fads drive demand for new cosmetics and beauty supplies.
Competition from Alternative Sources
Cosmetic and beauty supply stores compete with a variety of alternative sources, including traditional retailers (mass merchandisers, drug stores, department stores, supermarkets), salons, direct sales organizations, manufacturer-operated retailers, home shopping networks, and online-only retailers.
Industry size & Structure
The average cosmetic and beauty supply store operates out of a single location, employs about 20 workers and generates $2-3 million annually.
- The cosmetic and beauty supply retailing industry consists of about 8,400 firms that employ about 180,000 workers and generate about $22 billion annually.
- The industry is concentrated; the top 50 companies account for about 78% of industry revenue.
- Large companies include Sally Beauty Holdings; Sephora; Ulta Salon, Cosmetics, and Fragrance; and Perfumania Holdings. Large companies may have international operations.
- Some cosmetic and beauty supply manufacturers have retail operations. Estee Lauder has retail stores for M.A.C, Origins, and Aveda brands.
- The industry includes national and regional chains, franchises, and independent operators.
Industry Forecast
Cosmetic and Beauty Supply Stores Industry Growth
Recent Developments
Jul 8, 2024 - Sales Increase in May
- Health and personal care store sales, which includes cosmetic and beauty supply stores, continued to stand out as a leading retail growth category in May 2024, according to the CNBC/NRF Retail Monitor released by the National Retail Federation. Sales were up 6.8% year over year unadjusted and 1.2% month over month seasonally adjusted after April 2024’s sales growth of 5.2% year over year and 0.8% month over month. Total retail sales, excluding automobiles and gasoline, grew 3% unadjusted year over year in May 2024 and 1.3% seasonally adjusted month over month. Five of nine retail categories were higher in May compared to a year ago, led by online sales, health and personal care stores, and clothing and accessory stores. Health and personal care stores were also a top retail growth category in April. The CNBC/NRF Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions.
- A new Placer.ai report in Chain Store Age reveals that mall traffic is inching closer to pre-pandemic levels. During the pandemic, visits to all mall types tracked by Placer.ai’s Mall Index ranged from 10.7% to 15.3% lower than in 2019. Shoppers began returning to their mall shopping habits as the pandemic lessened, narrowing the traffic falloffs to 5.8% for enclosed malls in 2023 and only 1% for open-air malls. Flexible worker schedules may have contributed to higher weekday mall visits in the afternoon and early evening hours over the 2019 to 2023 period. New entertainment and restaurant tenants entering the malls in recent years have also helped to boost traffic. A new Scheels store that opened in September 2023 at the Chandler Fashion Center in Arizona, featuring a Ferris wheel and 16,000-gallon aquarium, helped drive traffic up by 45% in October and continued to be 30% higher in November and December.
- Prestige beauty sales were up by 9% in the first quarter of 2024 year over year, with fragrance becoming the fastest growing segment in the channel, according to a recent Circana report. Fragrance revenues increased 13% in the prestige channel, and skincare rose 10% in the prestige channel. Sales were up 2% in the mass market channel, with skincare emerging as the fastest-growing category. Within the mass market skincare category, body spray sales tripled in the first quarter of 2024 year over year, with face serum registering as the second highest segment. Makeup was the weakest performing category for both prestige and mass market categories. Makeup is the largest prestige beauty category, with lip makeup sales up 26% over the previous year’s first quarter. The report noted the influence younger shoppers are having on the industry. Spending per buyer among households with children in the first quarter of 2024 increased at five times the rate as those without children, per the report.
- Consumer confidence levels fell in June 2024, after an uptick in May, according to data from The Conference Board. The Conference Board’s consumer confidence index was 100.4 in June 2024 from 101.3 in May 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those under age 35 and those in the income category of over $100,000. Plans for large appliance and smart phone purchases rose on a six-month basis, while plans for car purchases stalled.
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