Covid-19: 46% don't know if their salon will survive until the end of social distancing
The National Hair & Beauty Federation (NHBF) is calling for the Government to help provide the personal care sector with a prolonged period of stability so that hair and beauty businesses have a fighting chance of recovery post-coronavirus lockdown.
According to data from the NHBF’s most recent State of the Industry Survey, 46% of respondents are unsure if their business will survive until the end of social distancing, which is predicted to be June 21 in England (but this is not set in stone).
Under the requirements in place prior to Covid-19 lockdown 3.0, which started back in December 2020, almost one in four (23%) of salons were not earning enough to cover outgoings such as rent, overhead, staff costs and stock, the report found, and only 38% were just about breaking even.
On the whole, only two in five businesses across the entire hair and beauty sector were making any kind of profit, the survey discovered. The NHBF states that the fixed outgoings and a lack of ability to diversify and generate income during lockdown has left businesses with no cash reserves and growing debt.
The lockdown closures have also had an impact on employment in the hair and beauty industry, with one in six employers (16%) having made redundancies as a result of the pandemic, and only two in five able to rule out further redundancies when furlough ends, the report found.
It’s not surprising that more than half of respondents (59%) have cut staff hours in order to save costs, and 55% admitted they’ve had to cut apprenticeships during the pandemic. Despite recent Government incentives for apprenticeships, only 11% are likely to take on new apprentices in the next three months.
“Financial stability will be the key to returning to profit and stability. Hopefully most hair and beauty businesses who have been able to return to work in the past few weeks will have enjoyed record income. However, they need the chance to get their head above water,” said Richard Lambert, NHBF chief executive.
“As things stand, they’ll have to start repaying rent arrears and the debts and loans accrued over the past year just when business rates relief and furlough come to an end. Tackling this tsunami of financial obligations under long term social distancing requirements will scotch any chance for the industry to be profitable.
“It will be even less likely that businesses will have the resources, capacity or financial ability to take on or keep apprentices, putting the future skills of the sector in real jeopardy.”
What policy measures is the NHBF recommending to Government:
The NHBF recommends that the most beneficial policy measures over the next six months would be:
- Social distancing measures and operational restrictions within close-contact guidance should be phased out as soon as it is safe to do so if the sector is to return to profit
- A temporary reduction in VAT
- Easier access to support grants should businesses struggle to recover
- An extension to the Self-Employed Income Support Scheme (SEISS) should the economy have failed to recover after September.
The NHBF’s survey was undertaken between March 15–17 and received 2,498 responses. It gathered views from a range of businesses in the personal care sector in England, Northern Ireland, Scotland and Wales.
Meanwhile, Save Our Salons is fighting to get the industry VAT support and reform from the UK Government. Find out more about the campaign.
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