45% of beauty businesses are making a profit – an increase from the beginning of this year – according to a new survey from the National Hair & Beauty Federation (NHBF).
The NHBF has released key findings from its quarterly State of the Industry survey in April, which shows a gradual recovery despite ongoing challenges.
In particular, businesses have responded to April’s wage rises by putting up prices, and recruitment intentions remain low which is a concern for the future of the sector.
The survey received 493 responses between April 11 and 24, 2024, and gathered views from a representation of businesses in the personal care sector across all areas including city centres, town centres and villages in England, Northern Ireland, Scotland and Wales.
Respondents included salon or barbershop owners, chair or room renters, home-based business owners, mobile or freelance practitioners, employers and the self-employed.
The vast majority (92%) of respondents were salon or barbershop owners.
8% were self-employed individuals and 5% 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 findings include:
- There has been a slight rise in businesses making a profit, with 45% of businesses reporting a profit (up from 40% in January), with 43% breaking even.
- 66% of businesses raised prices over the previous three months (up from 39%), to respond to minimum wage rises, with a further 46% planning to do so in the next three months.
- Over half of businesses (56%) remain partially or completely reliant on Government support.
- The top concerns are increases to the National Minimum Wage/National Living Wage (75%) and energy costs (61%). In response, businesses are raising prices (57%), delaying new hires (41%), putting off investments (23%), and reducing staff hours (22%).
- Recruitment challenges persist, with 73% saying it is harder to find staff compared to a year ago. Only 16% plan to hire new staff and 14% to take on apprentices over the next three months.
- While 74% of businesses are confident of survival over the next six months, growth intentions remain steady with 41% planning to grow the business. A consistent 14% plan to downsize or hand over the business.
In line with its recently launched manifesto, the NHBF is calling on the Government to:
- Implement further VAT reform, building on recent changes to the threshold which would facilitate a fairer tax system, address disguised employment issues and help create a more level playing field between sector businesses.
- Support employers and invest in training and apprenticeship schemes to address skills shortages and make careers in the hair and beauty sector more attractive to young people.
- Provide further targeted support to help businesses cope with rising costs, particularly in relation to the National Minimum Wage/National Living Wage increases and energy costs.
- Promote positive high street policies and investment, actively supporting these businesses as high street stalwarts. Local authorities should help create and maintain positive environments and community spaces that enhance wellbeing and encourage people to visit, socialise, and interact.
NHBF chief executive Caroline Larissey said, "These latest quarterly survey results reveal the sector's ongoing struggles, particularly with rising costs and staff shortages despite the recent end to the UK’s recession.
“We urge the Government to take swift action to support these businesses, which are central to local economies and community wellbeing across the UK."
The full report is available here.
