Hairstyling products become "UK's affordable recession treat" says THG

Hairstyling products are set to replace the “lipstick effect” as a key indicator of 'affordable luxury' shopping habits during economic downturns, according to new data from THG.

The “lipstick effect”, coined over twenty-five years ago, suggests sales of affordable luxuries, such as lipstick, rise during times of economic downturns as consumers seek out small, uplifting indulgences.

With the three months to October 2022 seeing the UK economy shrink by 0.3%, the group said that "the uplift in demand for haircare and hairstyling products is seeing hairstyling products replace lipstick as the barometer of affordable luxury buying habits”.

This trend towards hairstyling products is supported by an analysis from THG's Lookfantastic, which showed that orders of hairstyling products rose by 70% year-on-year, and orders of electrical hair tools grew by 17% in 2022.

In addition, online searches for hair rollers, hair straighteners and hair oils in October 2022 increased 103%, 47% and 60% respectively. By comparison searches for lipstick, lip balm and lip gloss fell, with lipstick seeing the biggest decline year-on-year.

Lucy Gorman, CEO of THG Beauty, said: “The ‘lipstick effect’ has long been established, but whether it still rings true today remains to be seen. Our data suggest that haircare and hairstyling may take on the mantle as the UK’s affordable recession treat.

"Across the beauty category, we are seeing consumers turning to ‘affordable luxury’ products from established brands for their essential beauty needs, as economic challenges play out. Similarly, the ‘Skinification' of haircare trend is continuing as consumers prioritise skin, hair and scalp health as part of holistic wellness regimes. We’re seeing this across THG’s own portfolio of prestige brands and in the thousands of premium brands that retail directly online through the likes of Lookfantastic and Cult Beauty.

"While the recession will undoubtedly tighten spending, it’s clear that UK consumers’ desire to look and feel good has not waned – and if the last recession is anything to go by the beauty, haircare and personal grooming sectors may prove to be some of the biggest recession busters.”

Last month, THG reported a 4.1% increase in sales to £2.25 billion for FY22 ending 31 December 2022. Sales in the group's beauty division increased 6.1% to £1.18 billion, whilst nutrition was up 2% to £672.4 million.

THG also recently shuffled its senior leadership team and appointed ex-Deloitte executive Damian Sanders as its new Chief Financial Officer. Sanders succeeds John Gallemore, who has been appointed Chief Operating Officer.