Competition across UK beauty retail continues to ramp up, as brands work to enter new spaces and stores push to draw in new custom. But where exactly is the market headed in 2025?
Growth despite cost-of-living crisis
Last year, the UK health and beauty market continued to grow despite the ongoing cost-of-living crisis, hitting EUR 53.6 billion (about GBP 45.4bn) after three years of consistent growth, according to data analytics firm GlobalData. Within this, beauty was forecast to continue growth at 3% CAGR between 2023 and 2028, led by fragrance and cosmetics; sectors set to surge by 16% and 17%, respectively, during this same period.
Mintel estimates matched – indicating UK beauty spending was up 3.8% in 2024, representing EUR 7.75 billion (GBP 6.45 billion) for the full year.
Tash Van Boxel, retail analyst at GlobalData, said the market had shown consistent growth largely due to the “essential nature” of beauty, ensuring sustained demand despite high inflation. The ’lipstick effect’ had also been in full swing, Van Boxel said, with consumers treating themselves to products in this category despite tighter budgets.
Tamara Sender Ceron, associate director for fashion and retail at Mintel, said: “The UK beauty retail market is experiencing notable growth and transformation.”
’Experience-led’ beauty retail
“Fashion retailers, health and beauty specialists and department stores have been dedicating larger areas of their physical spaces to beauty and opening standalone beauty sites,” Sender Ceron said.
Brands and retailers were also sharply focused on store design – creating spaces shoppers wanted to photograph and share on social media, she said. Diptyque’s flagship store was a “great example” of this, with its “captivating and immersive” retail space, she said. “Creating picture-perfect moments is a growing trend shaping future experiential retail spaces, the expert added.
Sender Ceron said blending online and offline retail experiences was also an ongoing focus, with efforts going towards creating ’phygital’ interactions – a mix of both. Lush, for example, had integrated Artificial Intelligence (AI) technology into its ’Lush Labs Lens’ space at its London Covent Garden store, enabling consumers to scan the brand’s packaging-free products for detailed information on formulations and more, she said.
Investment was evidently increasingly focused on improving overall shopper experience, she said – across all retail stores, from multibrand, flagships and pop-ups through to online websites and apps.
Boots, for example, opened its first dedicated beauty store in December 2023 in London and had made this store “experience-led” with a range of technologies and in-store services available to shoppers, like skin scanning and hair and scalp analysis. In the same year, Debenhams had also opened a London beauty space, moving the department major back into physical retail with a store offering various beauty services, including manicures, hair styling, facials, makeovers and masterclasses.
Multibrand stores have ’the edge’
And as UK retail pushed for more dedicated beauty space, Sender Ceron said it was the multibrand stores not the flagships performing best. This, she said, was because of price awareness and sensitivity remaining important for consumers over the last three years.
“Multibrand stores allow beauty shoppers to trade down to cheaper brands, dupes or own-label alternatives according to their budget while continuing to shop with the same retailer,” she said.
Chris Elliott, head of market insights at retail tech agency Medium Marketing, agreed, stating multibrand stores certainly had “the edge” in UK beauty retail currently.
“The curated product assortments offered by multibrand stores give them a significant advantage,” Elliott said. “Whether by delivering value, as Superdrug does, or capitalising on social media trends, like Boots, multibrand stores are excelling in meeting diverse customer needs and staying ahead of consumer trends.”
What about Sephora?
But what about new entrants to the market? Beauty major Sephora re-entered the UK in 2023 with a large London-based store, after exiting the market in 2005, and had opened a further six stores since.
“Sephora is pressing ahead with an aggressive store opening programme, which suggests to us that its re-entry has been a success,” said Sender Ceron. “While it is not yet close in terms of sales to the likes ot Boots and Superdrug, there is a definite buzz around the brand which must be worrying these retailers.”
Consumer research from Mintel’s upcoming Beauty and Personal Care Retailing UK 2025 report indicated, for example, that Sephora’s own-label brand was proving successful amongst Gen Z shoppers – a core audience for Superdrug – as well as consumers from higher-earning households – a key catchment for Boots.
Both Superdrug and Boots, therefore, were likely set to “compete more agressively with Sephora in the future”, she said.
Elliot said Sephora was “making bold moves” in the UK, announcing a complete redesign of every store in its portfolio. “This substantial investment in a market already showing strong performance signals Sephora’s commitment to long-term success,” he said. And whilst it may take a few years to make any “significant impact” on the UK high street, he said the beauty retailer was clearly “strategically positioning itself to become a significant player in the UK beauty retail landscape.”
Van Boxel agreed that “pressure will mount” as Sephora started to gain market share thanks to its narrow focus on beauty. However, for the time being, she said Sephora would be unable to compete with Boots and Superdrug because of the “impressive store estates” both retailers had built up over the years in the UK. And Boots, for example, had also already started responding to competition; building out its beauty range in-store and online and opening its first dedicated beauty London store in 2023.
Competition, competition, competition…
But pressure wasn’t only coming from Sephora, Van Boxel said, with beauty competition also on the rise amongst multi-sector retailers like Marks & Spencer and John Lewis & Partners.
Marks & Spencer, for example, was enhancing its beauty range and giving this category more in-store space – “evidently seeing it as a growth opportunity,” she said. The retailer had also branched out with mystery beauty boxes to enable consumers to try various brands and products before investing in full-size versions.
“Given their expansion into beauty, multi-sector retailers are expected to grow their market share over the next few years,” Van Boxel said. In reality, though, these stores were unlikely to pose any real threat to market leader Boots – the retailer that continued to dominate UK beauty year-on-year, she said.
Online beauty has shifted gear
Online beauty retail had certainly shifted gears in the UK, according to the experts. According to GlobalData, by 2028, 23% of UK health and beauty sales would take place online – up from 21% in 2021. Van Boxel said that for brands and retailers looking for a foothold in health and beauty, online was the place to start, particularly when growing brand awareness and building out a shopper base.
Elliot said: “At present, online platforms seem to be leading in innovation.” And this, he said, was largely due to the range of technologies being integrated across websites and apps, such as Augmented Reality (AR) for digital try-ons and Artificial Intelligence (AI) for assisted shopping.
Brands were also intertwining online with social, he said. “Retailers and brands have adapted by creating compelling online presentations that guide shoppers seamlessly from discovery on platforms like Instagram and TikTok to completing purchases online.” In addition, there had been a rise in Buy Now, Pay Later (BNPL) services as well as live shopping sessions across the likes of Amazon, Walmart and TikTok, he said.
’The impact of social media cannot be understated’
Sender Ceron said social media was certainly a powerful force in online beauty retail. Mintel research, for example, showed that 34% of social media users had bought a beauty or grooming product after seeing it on social media, she said, likely beause it was “now easier than ever.” But also, she said, because of there were more and more masterclasses popping up on social media platforms, led by brands and retailers.
Elliott said “the impact of social media cannot be understated,” adding that for health and beauty, Tiktok and Instagram were the main platforms to consider.
