The UK hair and beauty industry is set to reach £4.6 billion in revenue over the next five years, showing steady economic growth despite 85% of salons having to adjust their pricing in line with current inflation rates.
The data, from IBISWorld, was analysed by salon, spa, hair, and beauty software Vagaro alongside a recent survey conducted by the software brand in an ongoing effort to understand the industry’s pain points.
With the survey revealing that 85% of the respondents said they raised their prices due to inflation, rises to wholesale prices may be partly to blame, as 49% of respondents said their wholesale costs increased by more than 10%, while 45% said wholesale costs increased by 5-10%. Only 4% of the respondents said their wholesale costs increased by less than 5%.
The keep their business performing at top level regardless of the current economic climate, 39% of hair and beauty pros admitted they accessed their savings, while 16% accessed new lines of credit or business loans in the past year.
As for the services bringing in the most money for beauty businesses, haircuts, colour and highlights were revealed as the most popular services for consumers over the past year, accounting for over half (55%) of annual industry revenue.
Nail services were the next most popular treatments, making up 16.4% of annual revenue, with retail and product sales following behind with 14.9%.
While some respondents strategically reduced their expenses, for example, 28% cut back on products and inventory, and 13% cut back their hours of operation, they have also implemented promotional communication methods via social media, text and email marketing, and by offering special deals and discounts to keep their customers engaged and active.
Despite industry stuggles with the number of no-shows and cancellations salons seem to be experiencing, the majority of those surveys reported that they did not see a decrease in the number of services booked.
Speaking about the survey, Vagaro brand partner and global make-up director for L'Oréal Paris, Val Garland, said, “Consumers are more likely to spend money on a beauty experience in the current economic climate because they want to be made to feel special, they want the real-life experience of luxury and pampering that one can only really get in an actual physical beauty environment.”
Leading facialist and Vagaro brand partner Lisa Franklin added, "People often seek comfort and relaxation. Beauty services offer a way for individuals to pamper themselves and engage in self-care, providing a sense of well-being and stress relief, contributing to a person's self-esteem and self-image, which may be particularly important during challenging times. Looking good and feeling confident can have a positive impact on mental health.”
Have you adjusted your prices because of inflation? Let us know in the comments...
