FORTUNE -- If you're not aware already, we're living in a new retail world, where there isn't so much one large consumer base, but two divided by economic status. The well-off are buying bigtime, the worse-off are just trying to survive.
The bifurcation trend is present in apparel and home appliances, and it's holding true in the land of lipstick, mascara, and moisturizer too. When it comes to beauty product sales, the rich are puckering up, while the poor are pulling away.
Beauty and personal care sales overall in the United States have been sluggish of late. The market grew 1.8% last year, a slowdown from the 3.2% and 4.3% growth it recorded in 2012 and 2011, respectively, according to Euromonitor.
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But a look at the sales of premium beauty and personal care products (priced $21 and up) tells a slightly different story. In that sector, sales grew 3.3% last year, and there was an increase in sales of 16.9% in the period between 2008 and 2013. On the flip side, sales of mass beauty products (priced $20 and under) grew just 1.3% in 2013 and 8.3% in the past five years.
The higher sales of luxury beauty products that are typically sold at a department store or stand-alone beauty stores such as Sephora, MAC, or Shiseido reflect the economic recovery that's confined to the upper echelon of consumers. As of September 2013, 95% of the income gains since 2009 have gone to the top 1%. As a result, spending by the top 5% of earners has risen 17%; it's risen just 1% among the bottom 95% of earners.
"With the good stock market performance and the recovery in housing prices, affluent customers feel comfortable spending on premium products" says Virginia Lee, a senior research analyst at Euromonitor. With food stamp cuts and uncertainty over health care, lower income customers don't have that same confidence, she says, and cheaper beauty products for sale at drugstores have struggled as a result.
The rich vs. poor divide is obvious when comparing sales of premium and mass brands that sell similar beauty products. Sally Hansen, which sells nail polish that costs between $4 and $6, saw sales decrease by 7.3% in 2013. Sales at Essie, meanwhile, where a bottle of nail polish will run you $8 to $8.50, grew 13.6%. Cover Girl, with its inexpensive line of makeup you can find in any Walgreens (WAG) or CVS (CVS), saw 1.9% growth in 2013. Compare that to MAC's more expensive makeup, whose sales grew 7.2%. Neutrogena, whose 4 oz. bottle of facial moisturizer costs $12.99, saw sales increase 1.3% last year. Clinique, which sells a $27 4.2 oz bottle of moisturizing lotion, saw a 6% bump.
The sales figures don't only reflect consumer sentiment, of course, but also point to retailers' strategies. One influence that's totally separate from the economic inequality debate is the proliferation of specialty beauty stores Sephora and Ulta, which bring prestige brands out from behind the department store counter and into the hands of consumers, who now feel more comfortable purchasing a pricey product since they can test it first. Subscription box company Birchbox gives customers a similar experience at home.
And then there's the case of retailers buying into the theory that poorer people don't want discretionary items. In the third quarter of 2013, mass retailers did what's called a "de-stocking," according to Javier Escalante, an executive director at Consumer Edge Research who covers the household and personal care sectors. The stores removed beauty items from aisle endcap displays -- retail real estate known to prompt impulse buys -- and replaced them with more practical items, which helped depress mass beauty sales. "Retailers made the decision that people aren't into mascara, they're into sponges," Escalante says. "In a way, it becomes a self-fulfilling prophecy."
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