Fragrances Retailing - UK - June 2005

Contents

Introduction and Abbreviations

Definitions

Research methodology

Consumer research

ACORN

Other research

Abbreviations

Executive Summary

Womens fragrances dominate

Broadening distribution for fragrances

Department stores underperforming

Chemists sector consolidating

Specialist fragrance shops show high growth

Strong economy

Slow market growth and static prices

Peacock generation

Upwardly mobile consumers

High levels of usage

Where consumers shop for fragrances

Body Shop, missing out on 15-24s

Perfume Shop could open in high traffic travel points

Duty-free should claw back from spending abroad

Avon, missing a trick with men?

Supermarkets and Superdrug more relevant for male fragrances

Customer types

How number of shops used varies

Scope for a 壮ay it with perfume・campaign

Market dominated by Boots

Perfume Shop hurting the department stores

Buying from friends

Just a matter of time until the supermarkets do it better?

Internet sales still relatively minor

Emphasis on price-led offers

Retail Sales

All retail sales

• Figure 1: All retail sales, at current and constant 2000 prices, 2000-05

Sales through non-specialist non-food retailers

• Figure 2: Sales through non-specialised predominantly non-food stores, at current and constant 2000 prices, 2000-05

The chemists sector

• Figure 3: Sales through retailers of pharmaceutical, medical and toilet goods, at current and constant 2000 prices, 2000-05

Sector Structure

Pharmacies in the UK

Non-specialist non-food retailers

Department stores

Mixed goods

• Figure 4: Number of stores by selected leading mixed goods retailers, 2001-04

Supermarkets

Other retailers

Consumer Expenditure

Total spending on fragrances

• Figure 5: Consumer expenditure on fragrances, at current and constant 2000 prices, 2000-05

Market segmentation

• Figure 6: Consumer expenditure on fragrances, at current prices, by gender, 2000-05

Market by type

• Figure 7: Consumer expenditure on fragrances, by type (fine/mass), at current prices, 2004

Market Factors

PDI and consumer expenditure

• Figure 8: PDI and consumer expenditure, at current prices, 2000-10
• Figure 9: PDI and consumer expenditure at constant 2000 prices, 2000-10

High employment levels

• Figure 10: Total population in employment and male and female employment, 2000-10

Growth in ABs fuels market growth

• Figure 11: Socio-economic groupings, 2000, 2005 and 2010 (proj)

Population growth

• Figure 12: Age structure of the population, 2000, 2005 and 2010 (proj)

Holiday shopping

The Consumer

Key consumer findings

Mens fragrances

Usage patterns

Nine out of ten women wear fragrances

• Figure 13: Usage of fragrances (perfume and eau de toilette), by women, 2003 and 2004

Seven out of ten men wear fragrances

• Figure 14: Usage of fragrances, by men, 2003 and 2004

Consumer usage of fragrances

• Figure 15: Consumer usage of fragrances, March 2005

Where consumers buy womens fragrances

• Figure 16: Trend data, where consumers bought womens fragrances in the last 12 months, June 2002-March 2005
• Figure 17: Where consumers bought womens fragrances in the last 12 months, March 2005
• Figure 18: Where consumers bought womens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 19: Where consumers bought womens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 20: Where consumers bought womens fragrances in the last 12 months, by lifestage and Mintels Special Groups, March 2005
• Figure 21: Where consumers bought womens fragrances in the last 12 months, by lifestage and Mintels Special Groups, March 2005
• Figure 22: Where consumers bought womens fragrances in the last 12 months, by store used regularly for grocery shopping, March 2005
• Figure 23: Where consumers bought womens fragrances in the last 12 months, by store used regularly for grocery shopping, March 2005

Mens fragrances

• Figure 24: Trend data, where consumers bought mens fragrances in the last 12 months, June 2002 and March 2005
• Figure 25: Where consumers have bought mens fragrances in the last 12 months, March 2005
• Figure 26: Where consumers have bought mens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 27: Where consumers have bought mens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 28: Where consumers have bought mens fragrances in the last 12 months, by Mintels Special Groups, March 2005
• Figure 29: Where consumers have bought mens fragrances in the last 12 months, by Mintels Special Groups, March 2005

The Consumer ・Detailed Consumer Demographics

Question 1

• Figure 30: Where consumers bought womens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 31: Where consumers bought womens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 32: Where consumers bought womens fragrances in the last 12 months, by lifestage, presence of children and Mintels Special Groups, March 2005
• Figure 33: Where consumers bought womens fragrances in the last 12 months, by lifestage, presence of children and Mintels Special Groups, March 2005
• Figure 34: Where consumers bought womens fragrances in the last 12 months, by region, ACORN categories and working status, March 2005
• Figure 35: Where consumers bought womens fragrances in the last 12 months, by region, ACORN categories and working status, March 2005
• Figure 36: Where consumers bought womens fragrances in the last 12 months, media usage, store used regularly for grocery shopping and commercial TV viewing, March 2005
• Figure 37: Where consumers bought womens fragrances in the last 12 months, media usage, store used regularly for grocery shopping and commercial TV viewing, March 2005

Question 2

• Figure 38: Where consumers have bought mens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 39: Where consumers have bought mens fragrances in the last 12 months, by gender, age and socio-economic group, March 2005
• Figure 40: Where consumers have bought mens fragrances in the last 12 months, by lifestage, presence of children and Mintels Special Groups, March 2005
• Figure 41: Where consumers have bought mens fragrances in the last 12 months, by lifestage, presence of children and Mintels Special Groups, March 2005
• Figure 42: Where consumers have bought Mens fragrances in the last 12 months, by region, ACORN categories and working status, March 2005
• Figure 43: Where consumers have bought mens fragrances in the last 12 months, by region, ACORN categories and working status, March 2005
• Figure 44: Where consumers have bought mens fragrances in the last 12 months, by media usage, store used regularly for grocery shopping and commercial TV viewing, March 2005
• Figure 45: Where consumers have bought mens fragrances in the last 12 months, by media usage, store used regularly for grocery shopping and commercial TV viewing, March 2005

Retail Market Shares

More competitors fight for market share

Perfume Shop ・huge success story

Just another product

Door to door selling remains popular

Nothing the supermarkets wont try

And what about the Internet?

• Figure 85: Market share of fragrances, by type of retailer, 2001-04

Retailer Profiles

Number of outlets by retailer

• Figure 86: Outlet numbers for main fragrance retailers, at the year end 2003 and 2004

Boots the Chemist

• Figure 87: Boots the Chemist, financial performance, 2001-05

Lloyds Pharmacy

• Figure 88: Lloyds Pharmacy Ltd, financial performance, 2000-04

Moss Pharmacy (Alliance Pharmacy)

• Figure 89: E Moss Ltd, financial performance, 1999-2003

National Co-operative Chemists

• Figure 90: Co-op Pharmacy, financial performance, 1999-2003

Superdrug

• Figure 91: Superdrug, financial performance, 1999-2003

Department stores

Debenhams

• Figure 92: Debenhams, financial performance, 2000-04

House of Fraser

• Figure 93: House of Fraser, financial performance, 2001-05

John Lewis Partnership

• Figure 94: John Lewis, financial performance, 2001-05

Prestigious department stores

Selfridges

Harvey Nichols

Harrods

Other department stores

Allders

Beales

Fenwick

James Beattie

Independents

Specialist retailers

The Body Shop

• Figure 95: The Body Shop, financial performance, 2001-05

Strategic evaluation

The Perfume Shop

• Figure 96: The Perfume Shop, financial performance, 2000-04

The Fragrance Shop

Sephora

Virgin Cosmetics

Space NK

Clothing retailers

Marks & Spencer

Next

Supermarket retailers

Asda

Tesco

Other grocery retailers

Other retailers selling fragrances

Matalan

Argos

Specialist home shopping/direct mail

Avon

• Figure 97: Avon, financial performance, 1999-2003

Airport retailing

Retail Practices and Operational Issues

Intense competition in static market

Explosion of new launches

Shorter lifespan

Exclusives

Competitive retailing

Presence on the shelf

Position in the store

Promotional activity

Supplier relationships

Christmas trading

Staff

Store design

The way women and men shop

Regional differences

Market shares

The grey market

Undermining the fabric of brands

Internet shopping

Outlook

The Future

Little underlying growth

Quality and not quantity of new products required

Impact of the discounters

Outlook for department stores

Future for Boots

The specialists

Growth of the Internet

Summary

Forecast

• Figure 98: Forecast of the UK fragrances retailing market, at current prices, 2005-10
• Figure 99: Forecast of the UK fragrances retailing market, at current and constant 2005 prices, 2005-10

Factors incorporated in the forecast