UK Health & Beauty Sector Report summary
June 2025
Period covered: Period covered: 04 May – 31 May 2025
3 minute read
Health and Beauty sales
Health & Beauty sales rose by xx YoY in May compared to xx% growth in May 2024, according to the Retail Economics Retail Sales Index.
Footfall fell by -xx% in May 2025 (MRI software) compared to last year across all UK retail destinations, as consumers cutback on spending amid rising bills and elevated spending in the previous month.
Sales drivers
Several key factors influenced performance:
- Seasonal health(+): Pharmacies saw robust sales of hay fever tablets, nasal sprays, and eye drops as pollen counts spiked. The record sunshine in early May also drove sun care product sales up dramatically (+xx%, Kantar)
- Warm weather(+): Consumers increased their non-discretionary spend on beauty prep, as early summer weather prompted increased outdoor gatherings.
- Cautious consumer behaviour(-): Consumers are feeling the pinch from widespread bill increases during April. Nevertheless, they remain resilient as Health and Beauty emerged as the fastest growing retail category, with self-care and small indulgences thriving as larger splurges fall out of favour.
- Improved weather drives social activity: The quality of demand looks strong, with health and beauty emerging as one category where promotions did not dominate during May. This suggests genuine demand, with consumers perceiving many beauty products to be necessities or non-negotiable.
Gen Z and millennials face tighter discretionary spending but remain willing to buy premium viral products on TikTok. This has resulted in social media to continuing to drive beauty trends, with a notable surge in demand in May for select celebrity skincare brands.
While consumers remain cautious elsewhere, they continue to channel spending into this category as a mood booster. Many beauty retailers are expanding affordable ranges and gift sets, anticipating strong demand for “treat” items into summer.
Consumer optimism marginally improves
CPI inflation fell by xxppt from April to xx% in May, aided by cheaper air fares due to the timing of Easter and school holidays. Petrol prices eased as OPEC+ (Organization of the Petroleum Exporting Countries) continued their voluntary oil supply increase.
The GfK consumer confidence index rose by two points to -xx in June, driven by a five-point increase in the perception of the overall economy and a three-point rise in the general economic situation over the last 12 months.
The Bank of England held interest rates at xx% in their June meeting following a 6-3 majority vote.
However, there is growing optimism around potential base rate cuts in August and November aimed at stimulating the slowing economy.
This should aid future spend as borrowing becomes more affordable and the incentive to save reduces.
Economic outlook
GDP declined an estimated -xx% in April, driven by falls in services and manufacturing. The fall was partly driven by increased uncertainty from the constantly evolving Trump tariff impositions, causing companies to scale back investment.
Unemployment rose to xx% in the three months to April, likely due to businesses reducing labour costs in response to rising employer national insurance in April and national minimum wage.
Rising unemployment may lead to more cautious consumer behavior amid growing job security concerns, intensifying competition among retailers. This is evident in the current highly promotional climate as consumers allocate a larger proportion of their discretionary spending to discounted goods.
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Consumer confidence improved in June as optimism for the economy improved
Source: Retail Economics, GFK
