Insight Flash: Leveraging CE UK Transaction Data to Track Which Beauty Products Will Gain Share Amidst The Body Shop’s Decline

Pioneering beauty retailer The Body Shop recently announced plans to shutter half of its stores in the UK, just months after its takeover by an investor that had hoped to reverse the brand’s falling fortunes. Which of its competitors are best positioned to benefit from its collapse? Using CE’s UK transaction data we track the brand’s decline and discover which other high-street brands are most likely to gain share in the fragmented Beauty Products market.

The Body Shop Plans 40% UK Store Closures

High-street staple The Body Shop recently announced plans to shut down over 40% of its UK stores as part of a restructuring plan initiated by its new owner, which had hoped to reinvigorate the sustainable beauty brand and capitalize on robust growth in the broader beauty industry – but placed the company into administration after just 3 months of ownership, following a disappointing holiday shopping period. Using CE’s transaction data, we explore The Body Shop’s recent performance against top competitors like Lush, Rituals, and L’Occitane, and assess which of those competitors have significant customer overlap with the Body Shop and may be poised to benefit as it reduces its UK footprint.

Key Takeaways

  1. The Body Shop’s UK panel spend growth has lagged that of peers for three years, with Rituals emerging as the fastest-grower amongst a selection of high-street beauty brands.
  2. The Beauty Products market is large and highly fragmented, with the Body Shop accounting for just 5% of spend in our UK panel in 2023 (and competitors even less).
  3. Among high-street brands, privately-owned L’Occitane and Lush have the highest customer overlap with The Body Shop and may be the primary beneficiaries of its retreat in the UK market.

Beauty is in the Eye of the Cardholders

Once a category leader in the natural beauty products vertical, The Body Shop has faced mounting challenges in recent years from competitors like Lush, Rituals and L’Occitane, who have adopted many of its ethical and sustainable sourcing practices and eroded its unique value proposition. CE’s UK transaction data shows that following a brief resurgence during COVID (aided by the company’s direct-selling initiative) the Body Shop’s UK panel sales growth was negative in each of the past three years, significantly lagging that of peers and the broader Beauty Products industry. Rituals, which offers a more upmarket, luxurious value proposition was the fastest grower from 2021 to 2023, compounding its sales at roughly 40% per year.

Surveying the Competitive Beauty Landscape

CE’s UK Beauty Products subindustry is highly fragmented, with top high-street brands making up just 11% of total spend in 2023 (Superdrug, which is excluded from this analysis, is the largest individual brand with roughly 25% share). This fragmentation makes competition especially fierce amongst the multiple rivals vying for share. Despite its recent troubles, The Body Shop remains the largest among the brands we examined, with 5% share of spend – making its customer base an attractive target for smaller competitors looking to expand.

The Local UK Body Shop Has Shutdown: Using Cross-Shop to Find Alternatives

With The Body Shop drastically reducing its UK footprint, where might customers take their business? Using CE’s Cross Shop tool we can see which of The Body Shop’s high-street competitors have the highest shopper overlap and may see a lift in sales as the company retreats from the UK market. As shown in the chart below, L’Occitane, Lush, and Rituals saw the greatest percentage of their customer base also making a purchase at The Body Shop over the past year. L’Occitane had the most significant overlap, with over 18% of its customers also having shopped at The Body Shop – while these shared customers spent 20% less at The Body Shop than they did at L’Occitane, it’s reasonable to assume that L’Occitane could garner meaningful additional sales as customers look for alternatives. Lush came in second place, with a similar proportion of cross-shoppers to L’Occitane – and these shared customers actually spent ~10% more at The Body Shop than they did at Lush, making them potentially more valuable switchers.

Note: CE UK consumer transaction data for Feb-13-2023 through Feb-11-2024

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About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Matthew Volpe is an Insights Analyst for the CEIC. Follow him on LinkedIn.