Drugstores battle for beauty sales with premium products

11 Jan '07

3 min read

Over the past two years, national drugstore chains have added upscale brands and in-store skin care consultants in an effort to attract customers to the local drugstore for cosmetics and skin care purchases. A new study recently launched by Kline & Company aims to find out if these tactics are working. BEAUTY RETAILING USA 2006 will examine the overall retail landscape for the U.S. cosmetics and toiletries industry and determine whether the drugstore purchase channel has been able to gain ground in the $35 billion market.

“The cosmetics and toiletries market overall is showing signs of growth at around 4% in 2006, which is the largest increase in the past five years,” says Carrie Mellage, industry manager for the Consumer Products practice of Kline's Research division. “And while department stores and food stores continue to lose share, the battle between drug outlets and mass merchandisers is heating up.”

According to the latest edition of Kline's study, drugstores and department stores each claimed just less than 17% of the U.S. retail market for cosmetics and toiletries––significantly less than the 27% share enjoyed by mass merchandisers like Target and Wal-Mart.

National giant CVS/pharmacy is leading the push for a larger share by offering high-end cosmetic products through its Healthy Skincare Centers, which are now located in hundreds of its 6,200 stores throughout the U.S. Complete with a trained beauty advisor to provide tips and help customers choose products, the centers also highlight the retailer's growing line of exclusive brands and European formulas, including more clinically oriented offerings like L'Oreal's La Roche-Posay brand and NeoStrata's NeoCeuticals skin care line.

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