Get ready to pay more for makeup as inflation hits the cosmetics aisle
- Cosmetics prices rose by 2.3% between July to August 2022, according to market research firm NPD Group.
- The recent increase is the largest price hike in the cosmetics industry since December 2006.
With more people returning back to school, the office, or even gathering in person for the first since the pandemic, the pressure to quite literally put your best face forward seems higher than ever.
Prices for makeup, bath, and nail products increased by 2.6% from July to August 2022, according to data from market research firm NPD reported by Bloomberg. That's the biggest price hike since 2006.
NPD's report also found that beauty was the only category that grew on a unit sales basis between July 2021 and July 2022, indicating that growing costs have not dampened demand.
Maria Salcedo, senior vice president of merchandising for national beauty chain Ulta, said demand for cosmetics remains strong, despite price hikes.
"Consumers continue to adjust to inflation pressures by spending thoughtfully on what's valuable and important to them, including beauty," Salcedo told Insider by email. "We executed some price increases throughout the first half of the year, which is common across retail and beauty. We continue to expect pricing pressure compared to historical trends."
In late August, Coty — a multinational beauty company that owns brands like Sally Hansen, Covergirl, and Kylie Cosmetics — instituted its second round of price increases for the year.
The robust demand for cosmetics amid an economic downturn isn't a new trend, however.
During the recession of 2001, Leonard Lauder, heir of makeup mogul Estee Lauder, is said to have coined the term "Lipstick Index." Lauder had noticed that despite an eight-month downturn during which employment fell by 1.3 million, lipstick sales were up.
The idea is that products like lipstick can lift peoples' spirits even during hard times. The relatively lower price point — compared to splurges like cars, homes, or expensive vacations — makes the category feel like an "affordable luxury."
Others believe demand is strong because cosmetics and personal care products are a necessity.
"You are not going to stop cleansing or moisturizing your face in a recession, but you might look for a lower-cost solution available at a drugstore or Target vs at a high-end spa," Krista Moatz, a beauty investor and founder of the beauty, lifestyle, and entertainment site Popsugar, told Insider by email.
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