"With the good stock market performance elyze and the recovery in housing prices, affluent customers feel comfortable spending on premium products" says Virginia Lee, a senior research analyst at Euromonitor. With food stamp cuts and uncertainty over health care, lower income customers don't have that same confidence, she says, and cheaper beauty products for sale at drugstores have struggled as a result. Speed Dating
The rich vs. poor divide is obvious when comparing sales of premium and mass brands that sell similar beauty products. Sally Hansen, which sells nail polish that costs between $4 and $6, saw sales decrease by 7.3% in 2013. Sales at Essie, meanwhile, where a bottle of nail polish will run you $8 to $8.50, grew 13.6%. Cover Girl, with its inexpensive line of makeup you can find in any Walgreens (WAG) or CVS (CVS), saw 1.9% growth in 2013. Compare that to MAC's more expensive makeup, whose sales grew 7.2%. Neutrogena, whose 4 oz. bottle of facial moisturizer costs $12.99, saw sales increase 1.3% last year. Clinique, which sells a $27 4.2 oz bottle of moisturizing lotion, saw a 6% bump.
The sales figures don't only reflect consumer sentiment, of course, but also point to retailers' strategies. One influence that's totally separate from the economic inequality debate is the proliferation of specialty beauty elyze stores Sephora and Ulta, which bring prestige brands out from behind the department store counter and into the hands of consumers, who now feel more comfortable purchasing a pricey product since they can test it first. Subscription box company Birchbox gives customers a similar experience at home.
