“Premium-priced products remain one of the brightest spots in beauty,” according to NPD’s Karen Grant.

According to The NPD Group, the total U.S. prestige beauty industry—defined as products sold mainly in U.S. department stores—showed an increase of 7% in dollar sales in 2012 compared to 2011.

 “Coming off the wave of 2011, one of the most robust sales periods in over a decade for the beauty industry, 2012 has shown some great highs, along with some modest lows,” said Karen Grant, vice president and senior global industry analyst, The NPD Group—and a member of Beauty Packaging’s Board of Advisors. Grant shared NPD’s year-end findings on the U.S. and global beauty industry at its annual “Hot off the Press” event at the Harmonie Club in New York City in late January. This year, Cosmetic Executive Women (CEW) partnered to host the event.

By country, Grant said prestige beauty growth was strongest in the U.S. (7%), followed by the UK and Mexico (both 5%). Sales slipped the most in Argentina  (-10%), followed by Spain (-7%), Italy (-4%) and France (-1%).

 All of the U.S. prestige beauty categories posted healthy growth, said Grant. Prestige skin care led, at 10%, followed by makeup at 7% and fragrance at 5%, compared to 2011.

 “Even though consumer confidence continues to waver, there is momentum at both ends of the price and product spectrum. In 2012, along with smaller categories in beauty, we are seeing investment spending on premium-priced makeup, skin care and fragrance, as well as premium-priced sets, which led in growth once again. Even in Europe, where the economic environment is more challenging, the major premium-priced category, fragrance, was positive. Premium-priced products remain one of the brightest spots in beauty and will continue to carve out market share across all categories and geographies in the New Year,” said Grant.

 In addition, the U.S. Food/Drug/Mass channel experienced nearly a 3% increase in sales for total beauty in 2012, versus 2011. Makeup sales posted the biggest increase at 5%, followed by skin care at 3%, while fragrance sales declined 4% in dollar sales, compared to 2011. In National Chain stores, NPD reported that fragrance sales grew 7%.

 “In the U.S., although we have seen some tempering in sales performance, compared to 2011, growth remains positive for both the prestige and mass channels. The trend of prestige beauty outpacing mass beauty continues to be evident since the recessionary period of 2009 and will likely continue into 2013,” said Grant.

For more on beauty trends from Karen Grant, please go to nitesh_bp.rodpub.com/articles/2013/01/trends-forecast