TheIndustry.Beauty Mentions First Insight | 59% of Gen Z Cut Back On Groceries to Splurge On Beauty and Wellness
Lower-cost options in food, beverages and household goods are not just accepted but strategically chosen, allowing room in the budget for higher-spend categories such as health, wellness, and notably, skincare and beauty.
In fact, around 22% of Gen Z consumers report being willing to pay a premium for beauty products, underscoring the category’s elevated status in their spending hierarchy.
This behaviour is closely tied to how value is defined across categories. In household goods and food, price remains the dominant purchase driver, slightly outweighing quality.
Beauty, however, follows a different logic: quality becomes the primary consideration. This shift suggests that beauty is not treated as a commodity, but rather as an investment - whether in personal care, self-expression or long-term results.
At the same time, Gen Z’s relationship with brands is more fluid than that of previous generations. While national brands still rank first in overall purchase preference, they are less likely to immediately capture attention.
This dynamic creates a notable engagement gap. The research suggests that established brands may initially stand out, but they often lose momentum when it comes to deeper interest. By contrast, newer or challenger brands - especially those with differentiated positioning - tend to gain traction as consumers move from awareness to consideration.
The implication is not that legacy beauty brands are being rejected, but that they face greater competition in maintaining attention and relevance throughout the decision-making process.
Ultimately, Gen Z is not abandoning brands, nor are they uniformly trading down or up. Instead, they are reallocating - cutting back where differentiation is low and spending where it feels meaningful. Beauty sits firmly in the latter category, but it is also one of the most competitive, where attention must be earned beyond name recognition and sustained through clear, credible value.
The research comes from global retail platform First Insight.
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