How strong is the "lipstick effect" in the United States under high inflation? Retailers: Q2 is all supported by beauty products!

It is learned that high inflation has caused American consumers to reduce spending on non-essential items. However, Target, Kohl's, Macy's and Nordstrom have all emphasized the strong sales performance of beauty products in their second-quarter earnings reports released in the past few weeks. Walmart, the largest retailer in the United States, said that its beauty business is gaining momentum, with strong sales of cosmetics, skin care and hair care products. Walmart has been performing well in the high-end beauty field since it entered the field in March in cooperation with British retailer SpaceNK.

Under the "lipstick effect", American women are not stingy in buying beauty products such as lipstick and makeup. Makeup is all the rage. According to market research company IRI, in a year-on-year analysis of sales in various stores, Americans bought more eye, face and lip makeup - sales increased by 2%, 5% and 12% respectively.

At Macy’s, CEO Jeff Gennette noted on an earnings call late last month that consumers have focused on discounts and coupons and cut back on purchases amid high inflation. Still, beauty products and travel-related items such as luggage, shoes and clothing remain in high demand.

Meanwhile, Kohl's reported that shoppers were spending less and shifting toward value-oriented store brands. But shoppers were spending freely on skin care, makeup and fragrances. Meanwhile, Ulta Beauty, the largest beauty retailer in the U.S., said its overall sales in the most recent quarter increased by nearly 17% compared with the same period last year.

Sephora's sales reflect that of the 14 discretionary categories tracked by NPD Group this year, beauty was the only category to see sales growth. But that was driven primarily by high-earners making more than $100,000 a year.

It is learned that the strong sales of beauty products at other retailers are driven by Americans of all income levels. Target's beauty sales grew in the low single digits, while home furnishings, clothing and electronics all declined. Target said it will handle orders for non-essential items more carefully during the holiday sales season, but will rely on necessities such as beauty and groceries.

Editor ✎Estella/

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