Suppliers of health and beauty products can expect “relentless focus” on cost control and efficiencies from retailer partners in 2023, according to IRI’s annual report on Health & Beauty.
The retail data analysis company says it expects unit sales in the category to materially decline in the first half of next year as higher costs continue to flow through to higher shelf price tags. That will help ensure sales revenues will mostly hold up, though a marginal decline is likely.
It advises suppliers to revisit their sales forecasts, focus on contingency plans and agile decision-making, and put even more emphasis on promotions to drive affordability and improved volume.
It says digital purchases are on the climb, with sales in Australia doubling to record levels, compared to a rise of just 3 per cent for physical grocery store sales.
In particular, people are finding their way to pharmacies online, with an outstanding 84.1 per cent growth2 led by an increase in online household penetration.
“However, if you have e-commerce, watch if those sales are potentially reaching a ceiling and if new benchmarks need to be set, as strong sustained momentum in online sales might be showing first signs of plateauing. Fragility and circumstantial sales growth is behind this sectoral complexity.”