In the second quarter of 2010 global DF&TR sales of beauty products advanced +9.3% on average, including all markets and channels. This result was far short of the growth in Qtr1 2010 closing at a much more exciting +20.7%.

"Just as the global DF&TR beauty industry was recovering from one of its worst years in over a decade, a volcano in Iceland hit Europe in April causing beauty sales in Europe to fall by -18.6% compared to the month before and by -11.7% as compared to April 2009", says Yngve Bia, President of Generation Research.

In addition to the Icelandic volcano (Eyjafjallajokull) Europe was hit by an unprecedented debt crisis which may potentially prompt governments to raise taxes and crimp discretionary spending such as that on travel and beauty products – a debt crisis that resulted in the collapse of the Euro in the May and June period.

"In Qtr2 2010 the Euro lost -6.3% to the US dollar as compared to the same quarter in 2009", says Bia. "The May to June decline of the value of the Euro was a staggering -10.1%."

Clearly, the pushing of the Euro to record lows will encourage tourists to shop at European airports. Generation Research estimates that about 15% of all purchases of beauty prestige products are made by travellers. A weak euro will also boost margins of companies with a largely Euro-denominated cost-base.

Magnus Skjörshammer, Purchasing Director AS Tallink Silja Duty Free says: "I have been travelling a lot internationally recently and wherever I go I have never seen so many Americans around shopping, making up for lost times in the past few years possibly when the US dollar has been very weak and not providing much purchasing power."

L'Oréal SA, the world's No. 1 DF&TR supplier with a share in 2009 of 7.2% of this market (including YSL and L'Oréal Consumer Products) reported this week that second-quarter sales rose by more than +12% [in a weakened Euro against the US dollar – Ed’s note] as shoppers came back to spending more on luxury fragrance and cosmetics products and, in addition, demand increased in emerging markets. At a fixed rate of exchange of the Euro against the US dollar, sales gained +5.2%.

"Back in Qtr1 2010 L'Oréal's overall sales accelerated at the fastest pace in almost three years as shoppers spent more on Yves Saint-Laurent mascara and Lancôme fragrances, and distributors ended inventory cuts", said L'Oréal Chief Executive Officer Jean-Paul Agon in a statement.

In global DF&TR beauty sales in HY1 2010, Asia Pacific contributed a massive +27.8% to the average global beauty growth of +15.0%.

The growth in the Americas came to +24.0% in HY1 2010. Paulo Colino, Regional Director – Travel Retail Americas Parfums Christian Dior, comments: "So far this year we see North America coming on nicely at about +16.0% and Latin America at around an even better +29.0%. The performance of cosmetics is slightly better than fragrances."

Beauty sales in the Middle East marched on at a rate of +16.4%. Sales in Europe advanced +3.0% calculated in US dollars or +3.4% in the Euro in HY1 2010.

The TREND Beauty Moving Average Index, adding together the results over the past four quarters stretching from Qtr3 2009 to Qtr2 2010 and calculating the average, closed the first half of 2010 at 111.2, effectively meaning that global sales – in US$ – are currently moving on at an encouraging pace of +11.2%.

The statistical contents in this feature are only as up-to-date as their availability and compilation allowed at the time of publishing. All statistical numbers shown here are subject to review and revision in subsequent features and charts as additional source material becomes available.

Read more about the TREND Indices and their compilation – click here.

Read more about the duty free and travel retail Beauty industry on www.bestandmost.com