Beauty salons are facing significant cost pressures as material expenses rise 90% over the past decade, with new research highlighting a widening inflation gap between UK business costs and consumer prices
New research from card payment provider Dojo has revealed that beauty salons are among the UK businesses most affected by sustained inflation, with material and supply costs rising by 90% over the past decade.
The findings, published in the UK Inflation Index, show that while rising costs are impacting all sectors, beauty salon operating costs have increased at a significantly faster rate than consumer prices, putting long-term pressure on profitability across the beauty and wellness industry.
The study analysed 10 core cost categories between 2015 and 2025, including energy, insurance, rent, labour and industry-specific supplies, to assess how inflation is reshaping UK business operations.
Beauty salon material costs rise 90% in a decade
One of the most significant findings for the professional beauty sector is the sharp increase in material costs, which have risen 90% for beauty salons over the last 10 years.
Across UK businesses, material and supply costs increased by an average of 64%, but beauty salons have experienced a far steeper rise due to their reliance on specialist consumables, professional-grade products and essential tools used in daily service delivery.
This places sustained pressure on beauty salon cost management, as these inputs remain essential and non-negotiable for maintaining service standards.
Overall beauty salon running costs up 50%
The research shows that overall running costs for beauty salons have increased by 50% over the past decade.
This rise is driven not only by material costs but also by wider operational pressures:
- Energy costs have increased by 87% across UK sectors
- Insurance and licensing costs have risen by 76% on average
- Technology and software costs have more than doubled in some industries
- Labour costs have increased by 38% on average
Together, these factors reflect a structural shift in beauty business operating costs, rather than short-term inflationary pressure.
Inflation gap: business costs rising faster than consumer prices
Dojo’s research highlights a widening inflation gap, with UK business operating costs rising 11.75% more than consumer prices.
According to the CPIH Index (Consumer Prices Index including owner occupiers’ housing costs), consumer prices increased by 39.4% between 2015 and 2025, while average SME business costs rose by 48%.
This means beauty businesses are absorbing higher cost increases than they can typically pass on to clients, placing sustained pressure on beauty salon profitability and pricing strategy.
Methodology: how the UK Inflation Index was built
To ensure consistency across sectors, Dojo selected 2-3 representative SME business models per industry. Each model was assigned a standardised operational profile, including:
- Property type and premises size
- Staffing levels and operating hours
- Location and turnover range
- Equipment usage and operational structure
Using these profiles, annual cost estimates were calculated for 2015 and 2025 across ten key cost categories.
Data was sourced from authoritative UK datasets, sector benchmarks, and AI-assisted sourcing where appropriate. Mid-point estimates and inflation-adjusted values were applied to reflect realistic SME operating conditions.
Expert insight: how beauty businesses can respond to rising costs
Charlie Ashworth, head of research and insights at Dojo, said, “While operating costs have risen significantly over the past decade, with the right insight into their cost structure, businesses can be better equipped to respond to these pressures.
“For business owners, the opportunity lies in control and efficiency. With labour, energy, insurance and technology costs all contributing to long-term structural change, understanding where your exposure sits is now a strategic advantage.
“Reviewing supplier contracts, improving operational efficiency, reducing unnecessary overheads, and optimising payment systems can all help protect margins in a higher-cost environment.
“Understanding the supply chain is critical. Business owners should look closely at how much they pay per item and whether more competitive suppliers are available without compromising quality.
“Businesses that regularly assess their operating model and adapt pricing strategies are often better positioned to absorb cost pressures without compromising service or growth.”
What this means for the UK beauty industry
The findings show that beauty salon costs in the UK are rising faster than consumer prices, creating ongoing challenges for pricing, staffing and long-term sustainability.
As inflation continues to reshape the beauty and wellness sector, businesses are increasingly required to take a more strategic approach to:
- Cost control and supplier management
- Energy efficiency and overhead reduction
- Pricing strategy and service structure
- Digital payment and operational systems
With beauty salons now among the top 20 UK industries most impacted by inflation, the research underscores the importance of financial visibility and operational efficiency in 2026 and beyond.
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