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This summer, British supermarket chain Sainsbury’s began rolling out “Serum Bars” to more than 100 stores, where products were categorised by ingredient rather than by brand. Sainsbury’s rival Tesco then answered with its own “Sensitive Skin Bays” in 100 UK stores, in partnership with US skincare brand Aveeno. By grouping products by skin type, sales climbed 17 per cent year-on-year in the first six weeks, says Sarah Sturgeon, category buying manager for baby and beauty at Tesco.
Reflecting a wider shift in beauty, the moves underscore grocery’s ambition to become a more serious beauty player. As the internet transforms beauty shopping and research — enabling consumers to become experts in their own skincare needs — grocery retailers across the UK and the US are seeking to build credibility in the space and establish themselves as authorities on issues such as acne, dryness and sensitivity. And many are well positioned to expand their share of the global beauty market, which is forecast to generate $580 billion in revenue by 2027, according to McKinsey & Company, up from $430 billion in 2022.
Supermarkets have long been seen as an accessible destination for budget beauty. Tesco and Sainsbury’s stock mass-market brands such as Nivea, Garnier and L’Oréal. In the US, regional chains like Kroger and Albertsons carry brands like Maybelline and CoverGirl in dedicated beauty aisles.
Demand at this end of the market is accelerating. Katie Baron, content director at trends forecasting agency Stylus, points to the growing allure of “cool frugality”, especially among Gen Z. “Consider the huge appetite for ‘dupes’ and interest in brands like The Inkey List that will actively help consumers down-price their regimens, and Cerave, a brand that actively trades on a less-frills breed of kudos,” she says. “The trend may be born out of necessity, but the attitude and behaviours often stick.”
While demand for budget brands has risen amid the cost of living crisis, tapping into the prestige consumer is a different ballgame. To do so, grocers are increasing their investment in third-party brand partnerships, launching in-house brands and creating shopping sections based on consumer skincare concerns.
Bargain buys vs premium draw
For grocers keen to expand their beauty aisles, the question is whether to target a more premium beauty shopper or focus on their core mass-market customers, who shop for convenience and affordability. “The crux of supermarket beauty as it stands is about the thrill of accessing great products at bargain prices (we’ve referred to this as a feeling of ‘abstemious achievement’),” says Baron.
Some are simply doubling down on affordability. American grocery chain Trader Joe’s, which is best known for its seasonal snacks and modern take on frozen foods, is spurring its popularity in the private-label sector into the beauty space. The Trader Joe’s brand lends itself well to beauty dupes, and several of its products have gone viral. #Traderjoesdupe has over 12.5 million views, and #traderjoesskincare has 18.4 million. Many herald its Brazil Nut Body Butter ($5.99) as a dupe for Sol De Janeiro’s Bum Bum Cream ($48) and its Watermelon Overnight Mask ($6.99) to Glow Recipe’s Watermelon Glow Sleeping Mask ($40). Influencer Instagram pages such as @traderjoeslist (1.9m followers) and @traderjoesobsessed (674,000) have been established as a result of consumer demand and cemented its reputation as an accessible beauty haven.
Consumers trust the efficacy and price points of these sections because they view them as an extension of the healthy, budget-friendly foods that initially attracted them to the grocery store to begin with. Banking on this consumer connection, the business’s beauty strategy has been to embrace the established demand for dupes by launching affordable beauty alternatives to popular luxury products, thus building further brand awareness on TikTok with millennials and Gen Z.
British food and clothing retailer Marks & Spencer is attempting to strategically position itself as a hub for beauty shopping by building a portfolio of in-house and third-party brands. In Q2, it launched its first own-brand skincare range in seven years, Fresh Elements, a 19-piece lineup starting from £8 designed to appeal to a younger market. It has also embraced dupe culture with the expansion of its Discover fragrance range of affordable scents, priced between £6 and £15, that have proven popular on TikTok for their similarity to Chanel, Byredo and Maison Margiela Replica. It is also dabbling in the prestige market, introducing brands like Floral Street and Estée Lauder.
“By welcoming and growing a host of dynamic, market-leading third-party partners to complement our own-brand ranges, we’re further growing our branded beauty offer, which is helping to inspire loyalty and repeat purchases whilst also driving new customers to M&S as we continue to build market share in the category,” says Heidi Woodhouse, director of home, beauty and furniture at M&S.
Opportunity for entering the prestige market lies with smaller, upscale establishments. LA-based grocery store Erewhon has 10 locations across the state and is positioning itself as a destination for affluent beauty consumers, having built a community for luxury health-conscious shoppers who are loyal to its prepared foods and elevated private-label items. It’s common to see shoppers, including A-list celebrities and influencers, use the store’s recognisable meticulous merchandising as backdrops for photo ops. Its small but growing third-party beauty categories span bodycare, haircare, skincare and supplements from Osea, Salt & Stone, Jolie, Pique and Agent Nateur.
In 2022, Erewhon launched an eponymous vegan skincare line, spanning luxury, essential oil-based face creams and exfoliants alongside grocery-adjacent personal care items such as hand sanitiser. Erewhon’s signature marketing play, however, is brand collaborations to both attract new customers and strengthen its image as beauty and wellness specialists. Examples include Summer Fridays founder Marianna Hewitt launching a smoothie partnership with ingredients used in its products, along with Hailey Bieber’s ‘Skin Glaze’ smoothie that quickly took off on TikTok.
Whole Foods, the premium grocer acquired by Amazon in 2017, has been growing the size of its beauty department — which specialises in clean products — in the years since. It sells brands like Weleda and Dr Hauschka, and in September, the store hosted a “Better Beauty Swap”, encouraging customers to trade in any skincare or cosmetic product in exchange for 25 per cent off purchases.
Ultimately, what gives specialist beauty retailers like Ulta and Sephora a significant edge when it comes to targeting masstige brands is trained advisors as educators for specific brands or product categories. “The more premium the proposition gets, the more there’s a necessity for individualised service,” says Baron. It’s an obstacle that’s both costly for supermarkets and comes down to store sizes, which still require a majority of floor space for food and home goods in order to maintain its core business focus.
But for budget beauty brands, there is a renewed opportunity to build awareness through grocery stores. “The reformation of the supermarket itself as a more exciting destination — whether that’s in a new hybrid food hall meets grocery concepts or simply a new focus on health and wellness, is laying the groundwork for supermarkets to become credible beauty destinations,” Baron says.
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