Consumers are proving resilient when it comes to spending on health and beauty products.
That’s one of the takeaways this past week from Target and Walmart’s earnings calls, and from other retailers, too.
By and large, shoppers seem comfortable using online channels, and in some cases omnichannel options, to get the items they need to feel and look better.
Target said in its investor materials that there had been strength in the health and beauty segment, despite a general pullback in spending that saw comparable sales slip by 5.4% year on year.
During the conference call with analysts, Chief Growth Officer Christina Hennington said that “essentials and beauty grew in the mid-single digits, led by beauty, which delivered comp growth in the low-double digits. Within our beauty offering, core beauty delivered double-digit growth, while sales from Ulta Beauty at Target more than doubled compared with a year ago.”
Walmart’s own results in to the most recent quarter noted that health and wellness items were among the stronger segments beyond the continued strength seen in groceries.
CFO John Rainey said on the call that U.S. comparable sales – excluding fuel – were up 6.4% with growth in-store and across digital transactions.
Regarding specific categories, he said, “health and wellness sales continue to outperform, and we’re encouraged by the modest sequential improvement in general merchandise. eCommerce sales were up 24%, driven by store fulfilled pickup and delivery and advertising.”
During the call, management stated that the health and wellness categories saw a high teens percentage point increase.
“We saw a 240 basis point shift in sales mix from general merchandise to grocery and health and wellness in Q2,” Rainey said.
“We contend that the shift might indicate that budget-constrained consumers are moving their dollars towards spending on health and beauty — which in turn would place those categories ahead of others, and that self-care and preserving/improving health may continue to be resilient even in the face of macro pressures,” the CFO observed.
Digital Retailers to See Tailwinds
Elsewhere, PYMNTS data underscore the digital shift towards buying these goods online.
Amazon is, of course, in the mix here.
At the end of the most recent quarter for which we have compiled data, Amazon had 5.1% of sales in health and beauty — up from around 2% before the pandemic — and topped only slightly by Walmart, with 5.9% of the category.
More recently, in the report “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave,” a PYMNTS and Amazon Web Services collaboration, we found that 39% of consumers are highly likely to increase their online purchases of health and beauty products in the next year, a move that would be a boon to the likes of Target, Walmart and Amazon.
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