Business Expectations Have Improved

Although there is a positive feeling in the entire industry, there are still several factors that have a negative and detrimental impact on many companies, according to the recent state of the industry survey by the National Hair & Beauty Federation (NHBF).

The improvement that we noticed in April 2023 continued, with 43% of companies making a low or good profit, 42% reaching the breakeven point and fewer making a small or substantial loss. There is good news for some customers, as the general upward trend in prices is slowing down. In the last three months, almost half (55%) of companies have increased their prices, while the other half (52%) said they would do so in the next three months.

Prices are rising because companies have to react to the continuing rise in costs. Energy costs remain at the top of the concerns of companies (79%), followed by the increase in the costs of commercial deliveries and the increase in the national minimum wage/National living wage (NMW/NLW).

Debt remains a problem for more than half (56%) of companies in the sector. For 38% of those in debt, it has increased and more than half (55%) say that the clarification will take more than two years. Meanwhile, dependence on external assistance remains constant; more than half of companies (56%) still partially or completely depend on government assistance, but 44% say they do not depend on continuous support.

Recruitment and hiring intentions have improved: 28% of employers said they would definitely or probably hire new employees, compared to 21% in April.

Continuing this positive attitude, almost a quarter (23%) of companies said that they would definitely or probably hire interns in the next three months, compared to 15% in April. These companies are therefore part of the 43% who said they wanted to develop their business quickly or moderately. The proportion of companies that intend to maintain the same size (42%) is similar to that of the previous survey and 15% plan to reduce or sell the company (reduced by 19%).

Richard Lambert, Chief executive of NHBF, said: “Business survival expectations have improved and are the most positive we have seen since these surveys began three years ago. Almost three quarters (72%, compared to 64%) are now convinced that they will survive. However, there are still a significant number of companies (25%) who do not know if they will survive in the next six months, which shows the effects of the energy crisis. We continue to discuss with the government and Ofgem the behavior of some of the main suppliers to the foreign energy market.”

The survey received 510 responses between June 26 and July 10, 2023. It gathered views from a good representation of companies in the personal care sector in all areas, including city centres, town centres and villages In England, Northern Ireland, Scotland and Wales.

Respondents included salon or barbershop owners, chair or space renters, landlords, mobile or self-employed practitioners, employers and self-employed workers. The vast majority (90%) of respondents were owners of salons or hairdressing salons. 10% were self-employed, of which 6% are in the broader field of space rental, mobile and self-employed; this is either the sole objective of their company, or in addition to owning a Salon or a hairdressing salon.