Executive Summary

Report Scope

• Beauty and personal care retailing
• Sources for consumer spending
• Abbreviations
• Technical notes
• Financial definitions
• Currencies
• Country codes
  • Figure 1: Country codes
• VAT
  • Figure 2: Europe: Standard VAT rates, 2010/11

The Market: Economic and Demographic Context

• The economy
  • Figure 3: Germany: Real-terms, year-on-year GDP growth, Q1 2006-Q3 2011
• • Figure 4: Germany: Selected labour market indicators, Q1 2009-Q3 2011
• • Figure 5: Germany: Consumer confidence and retail trade confidence, Dec 2010-Nov 2011
• Inflation
  • Figure 6: Germany: Consumer prices index, Jan 2006-Oct 2011
• Demographics
  • Figure 7: Germany: Over 65s as % total population, 1960-2030
• Implications for beauty retailers
• Economy:
• Demographics:

The Market: Consumer Spending

• Personal care spending data
• • Figure 8: Germany: Consumer spending on personal care and other selected categories, 2006-10
• Personal care goods spending per capita
  • Figure 9: Germany: Annual per-capita consumer expenditure on personal care goods, 2006-10
• Personal care goods spending as a share of all expenditure
  • Figure 10: Germany: Consumer spending on personal care goods as percentage of total consumer spending, 2006-10
• Spending on personal care goods relative to services
• • Figure 11: Germany: Spending on personal care goods vs spending on personal care services, 2006-10
• Trade association data
• • Figure 12: Germany: Total consumption of cosmetics and toiletries products, 2010-11
• Spending breakdown by category
• • Figure 13: Germany: Consumer spending on skin care and hair care, 2010-11f
• • Figure 14: Germany: Consumer spending on personal care, by major category, 2010-11
• Category performance and prospects

The Market: The Health and Beauty Specialists Sector

• Economic outlook
• Retail sales and forecasts
• • Figure 15: Germany: Beauty retailers’ sales, 2006-10
• • Figure 16: Germany: Beauty retailers’ sales forecasts, 2011-16
• Index of retail sales
  • Figure 17: Germany: Index of retail sales: Annual % change, Jan 2010-Oct 2011 (current prices)

The Market: Outlet and Enterprise Data

• • Figure 18: Germany: Number of retail enterprises, 2005-09
• • Figure 19: Germany: Number of outlets, 2005-09

The Retailers: Channels of Distribution

• Drugstores dominate the beauty market
• Perfumeries led by Douglas
• Grocers gain share thanks to Schlecker’s crisis
• Department stores in decline
• Online
• Others
• Direct selling
  • Figure 20: Germany: Specialist beauty members of the direct selling association, 2011

The Retailers: Online

• Proportion of consumers shopping online
  • Figure 21: Germany: Percentage of individuals who have purchased goods or services online within the preceding three/12 months, 2006-11
• • Figure 22: Percentage of female consumers who have purchased beauty products online in the 12 months to March 2011, Italy, Spain, Germany, France and UK
• Leading websites by usage
  • Figure 23: Germany: Leading transactional beauty websites, July 2011

The Retailers: Leading Specialists

• Schlecker in crisis – files for insolvency
• dm set to take market leader position
• Dynamic Rossmann
• Müller lagging a little, but still outperforming Schlecker
• Douglas dominates in perfumery
• Budnikowsky, a regional player
  • Figure 24: Germany: Leading beauty retailers, 2010/11

The Retailers: Market Shares

• • Figure 25: Germany: Leading beauty retailers’ estimated shares of sector sales, 2010

The Consumer: Where They Shop

• • Figure 26: Germany: Outlets from which make-up/hair care/skin care/fragrance products were bought by female consumers in the last 12 months, March 2011
• Where they shop by age group and product type
• • Figure 27: Germany: Outlets from which make-up products were bought by female consumers in the last 12 months, by age group, March 2011
• • Figure 28: Germany: Outlets from which hair care products were bought by female consumers in the last 12 months, by age group, March 2011
• • Figure 29: Germany: Outlets from which skin care products were bought by female consumers in the last 12 months, by age group, March 2011
• • Figure 30: Germany: Outlets from which fragrance products were bought by female consumers in the last 12 months, by age group, March 2011

dm-drogerie markt

• • Figure 31: dm-drogerie markt’s Sales of share of health & beauty retailers’ sales in Germany, 2007-11
• Strategic evaluation
• Background
• Company performance
• • Figure 32: DM-drogerie markt, 2006/07-2010/11
  • Figure 33: DM-drogerie markt: Outlet data, 2007-11
• Store formats
• Retail offering
• e-commerce and home shopping

Douglas

• • Figure 34: Douglas perfumery: Share of European health and beauty specialists’/beauty specialists’ sales, 2007-11
• Strategic evaluation
  • Figure 35: Douglas Perfumeries: Sales contribution of German/International stores, 2007-11
• • Figure 36: Douglas Perfumeries: German/International store portfolio, 2007-11
• • Figure 37: Douglas Perfumeries: Stores per million capita in selected countries, 2010
  • Figure 38: Douglas Perfumeries: Sales per store, 2010
• • Figure 39: Douglas Perfumeries: Sales per store growth rates in selected countries, 2006/07-2009/10
• Background
• Company performance
  • Figure 40: Douglas Holding: Group financial performance, 2006/07-2010/11
• • Figure 41: Douglas Perfumeries: Group financial performance, 2006/07-2010/11
  • Figure 42: Douglas Perfumeries: Outlet data, 2007-11
• Retail offering
• e-commerce and home shopping

Lush Retail Ltd

• • Figure 43: Lush Retail Ltd: Sales as share of beauty and cosmetics specialists’ sales in UK, 2006-09
• Strategic evaluation
• Background
• Company performance
  • Figure 44: Lush Retail Ltd: Group financial performance, 2005/06-2009/10
• • Figure 45: Lush Retail Ltd: Outlet data, 2006-10
• Store formats
• Retail offering
• e-commerce
  • Figure 46: Lush: Online consumer demographics, three month average to October 2011

Müller

• • Figure 47: Müller: Estimated sales as share of health & beauty and beauty retailers’ sales in Germany, 2006-10
• Strategic evaluation
• Background
• Company performance
  • Figure 48: Müller: Estimated group sales performance, 2006/07-2010/11
  • Figure 49: Müller: Estimated outlet data, 2007-11
• Retail offering
• e-commerce and home shopping

Rossmann

• • Figure 50: Rossman’s Sales of share of health & beauty retailers’ sales in Germany, 2006-10
• Strategic evaluation
• Background
• Company performance
  • Figure 51: Rossmann, Sales performance, 2006-10
• • Figure 52: Rossmann: Outlet data, 2006-10
• Store formats
• Retail offering
• e-commerce and home shopping

Schlecker (incl Ihr Platz)

• • Figure 53: Schlecker: Share of European health and beauty specialists’ sales, 2006-10
• Strategic evaluation
• Background
• Company performance
  • Figure 54: Schlecker: Estimated sales performance, 2006-10
• • Figure 55: Schlecker: Estimated outlet data, 2006-10
• Store format
• Retail offering
• e-commerce and home shopping

The Body Shop

• • Figure 56: The Body Shop UK: Estimated sales as share of UK cosmetics and toiletries specialists’ sales, 2006-10
• Strategic evaluation
• Background
• Company performance
  • Figure 57: The Body Shop: Financial performance, 2006-10
• • Figure 58: The Body Shop: Estimated UK and RoI sales performance, 2006-10
• • Figure 59: The Body Shop: Outlet data, 2006-10
• Store formats
• Consumer profile
  • Figure 60: The Body Shop shoppers in last 12 months, by gender, age and socio-economic group, November 2011
• • Figure 61: The Body Shop shoppers in last 12 months, by region and ACORN group, November 2011
• Retail offering
• e-commerce and home shopping
  • Figure 62: The Body Shop: Online consumer demographics, three month average to October 2011

Appendix – The Market

• Population
  • Figure 63: Europe: Population, by age group, 2005
  • Figure 64: Europe: Population, by age group, 2010
• • Figure 65: Europe: Population, by age group, 2015
  • Figure 66: Europe: Population, by age group, 2020
• GDP
  • Figure 67: Europe: GDP (current prices), 2010
  • Figure 68: Europe: GDP growth rates (current prices), 2001-Q3 2011
  • Figure 69: Europe: GDP growth rates (constant prices), 2001-Q3 2011
• Consumer spending
  • Figure 70: Europe: Households’ consumer spending (current prices), 2010
  • Figure 71: Europe: Households’ consumer spending growth rates (current prices), 2001-Q3 2011
  • Figure 72: Europe: Households’ consumer spending growth rates (constant prices), 2001-Q3 2011
• Consumer prices
  • Figure 73: Europe: Harmonised index of consumer prices, 2001-10
• Unemployment
  • Figure 74: Europe: Average rate of unemployment, 2001-10
• Interest rates
  • Figure 75: Europe: Interest rates, 2005-Q4 2011
• Consumer confidence
  • Figure 76: Europe: Consumer confidence, Jan 2011-Dec 2011

Appendix – Consumer Data

• Make-up
  • Figure 77: Outlets from where make-up was bought in the last 12 months, UK, March 2011
• • Figure 78: Most popular outlets from where make-up products were bought in the last 12 months, by demographics, Germany, March 2011
• • Figure 79: Next most popular outlets from where make-up products were bought in the last 12 months, by demographics, Germany, March 2011
• Fragrances
  • Figure 80: Outlets from where fragrances were bought in the last 12 months, March 2011
• • Figure 81: Outlets from where fragrance products were bought in the last 12 months, by demographics, Germany, March 2011
• Skincare
  • Figure 82: Outlets from where skincare was bought in the last 12 months, March 2011
• • Figure 83: Outlets from where skincare products were bought in the last 12 months, by demographics, Germany, March 2011
• Haircare
  • Figure 84: Outlets from where haircare was bought in the last 12 months, March 2011
• • Figure 85: Outlets from where haircare products were bought in the last 12 months, by demographics, Germany, March 2011