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1. How the Brexit
can impact the
Beauty & Personal
Care business?

2. The United Kingdom population has made
a vote, and the Brexit is now a closer
reality for Europe.
Forecasting its impact is difficult, and in those
inevitable, given the unprecedented political scenario

3. Overall, UK sales over 2020 are previewed to be US$205 million less
in a Brexit scenario. This is a combination of higher operational costs
operational costs plus lower consumer spending that could result in the
premium segment being hit hardest, especially at the mid- to low-end
of this segment. Consumers are likely to trade down, and the industry
may have to moderate its premiumisation efforts in the beauty
business – the consumer spending could switch to smaller formats,
lower concentrations and less frequent shopping missions. Therefore
raw materials, especially in high-end fragrances, can be costly to
import, and trade restrictions, coupled with a lower currency, could
result in higher cost to the shopper or personal care brands absorbing
the cost and/or lessening the quality of the products to limit price
increases.
Consumers are likely to trade down

4.  The result would be a stronger premium-mass switching in
fragrances. Skin care and colour cosmetics would also
witness weaker activity. Potentially, this could facilitate a
resurgence of the mass segment, which in pre-Brexit times
had weaker forecasting than its premium counterpart in
these beauty channels.
 Furthermore, green and health-related categories, such as
oral care and derma cosmetics are likely to remain growing
because consumers assess their priorities in health-aligned
beauty regimes.
Resurgence of the mass segment

5. We could say the price-efficacy value becomes crucial
more than ever in this Brexit context, keeping in mind
that quality is non-negotiable.
Sources: euromonitor/nielsen
Conclusion