While the beauty sector faces ongoing economic pressures, particularly in recruitment and rising business costs, the overall picture is one of gradual recovery.
The National Hair and Beauty Federation (NHBF) has unveiled key insights from its latest quarterly State of the Industry survey, conducted in September 2024.
With 46% of businesses reporting profits and fewer companies experiencing losses, there’s reason for optimism as the sector adjusts to wage increases and fluctuating prices.
The NHBF survey gathered insights from 493 participants between September 16-30, 2024. The respondents represented a broad cross-section of the personal care sector across England, Northern Ireland, Scotland and Wales. Businesses from city centres, town centres and villages were all represented.
A majority (90%) of respondents were barbershop owners or salon owners (both hair and beauty). 9% were self-employed individuals and 4% were involved in the wider space renting, mobile and freelance part of the sector; this is either the sole focus of their business or in addition to being a salon or barbershop owner.
Key industry insights: profits, prices and recruitment challenges
According to the NHBF survey, the beauty industry continues to stabilise, but recruitment remains a pressing issue for businesses. Here are the standout statistics:
- Profits and losses: 46% of businesses reported making a profit, 41% are breaking even and only 14% are making a loss – an improvement from 16% in July.
- Price adjustments: 40% of businesses raised their prices over the last three months, a drop from 58% in July, while 56% are planning price hikes in the coming months to offset rising costs.
The impact of wage and business costs on salons
The beauty industry is dealing with rising operational costs, particularly due to the National Minimum Wage/National Living Wage increases. The NHBF survey reveals:
- Concerns: 76% of businesses are concerned about wage increases, 55% about energy costs and 52% about trade supplies.
- Responses to rising costs: To manage these challenges, 50% of salons are raising prices, 47% are holding off on hiring new staff and 26% are reducing staff hours.
With a projected 5.8% rise in the National Living Wage in April 2025, many businesses plan to increase prices (66%), reduce staff hours (31%) or reduce staff numbers (31%).
Read this article for some tips on cutting costs and increasing profits in your salon.
Recruitment remains low for staff and apprentices
Recruitment challenges persist in the beauty sector, with businesses struggling to hire across key roles.
- Workforce stability: 53% of businesses have maintained their workforce size, while 18% saw a decrease and 18% experienced an increase in staff.
- Skills shortages: Senior stylists (31%), stylists (30%), apprentices (22%) and beauty therapists (11%) are the most challenging positions to fill.
While 20% of businesses were considering new hires in July, that number has dropped to 15%. Similarly, apprenticeship recruitment has fallen from 15% in July to just 8% in the most recent survey.
Optimism for growth despite economic pressures
Despite the recruitment struggles, many businesses remain optimistic about growth:
- Turnover expectations: 27% of businesses expect turnover to increase slightly or significantly in the next quarter, while 50% anticipate no change and 20% foresee a slight decline.
- Growth intentions: 38% of businesses plan to grow, either moderately or rapidly, while 43% intend to maintain their current size.
The NHBF has also voiced support for several business rates reforms, including raising small business rates relief from £12,000 to £25,000, continuing the retail discount and freezing the small business multiplier.
NHBF chief executive Caroline Larissey emphasised the importance of government intervention to support the beauty sector. She said, “These latest quarterly survey results show that sector recovery remains slow but steady. However, low recruitment intentions are a real concern for the industry across both staff and apprentices.
“In our letter to the Chancellor ahead of the Autumn Budget, we made it clear how important targeted support to employers is to counterbalance rising wages, either through the Employment Allowance, targeted support for training apprentices and maintaining the business rates retail discount.
“We urge the Government to take swift action to support these businesses, which are central to local economies and community wellbeing across the UK.”
To read the full report, visit the NHBF website.
