While there is an overall feeling of positivity in the industry, there are still several factors having a negative and damaging impact for many businesses, according to the latest State of the Industry Survey from the National Hair & Beauty Federation (NHBF).
The improvement we saw in April 2023 has persisted, with 43% of businesses making a small or good profit, 42% breaking even and fewer making a small or substantial loss. There is good news for some clients, as the general trend towards increasing prices is slowing. Over the previous three months, nearly half (55%) of businesses raised their prices, with the other half (52%) saying they will do so over the next three months.
Prices are rising because businesses are having to respond to continued rising costs. Energy costs are still at the top of business concerns (79%), followed by increased cost of trade supplies and increases to National Minimum Wage/National Living Wage (NMW/NLW).
Debt is still a problem for over half (56%) of sector businesses. For 38% of those with debt it has risen, and more than half (55%) say that it will take more than two years to clear. Meanwhile, reliance on external support remains steady; over half of businesses (56%) are still partially or completely reliant on government support, however 44% say that they are not reliant on continued support.
Staffing and recruitment intentions have improved, with 28% of employers stating they are definitely or likely to take on new staff, up from 21% in April.
Continuing this positivity, nearly a quarter (23%) of businesses said they are definitely or likely to take on apprentices in the next three months – up from 15% in April. These businesses therefore fall into the 43% that said they intend to grow their business either rapidly or moderately. The proportion of businesses intending to remain the same size (42%) is similar to the previous survey and 15% are planning to downsize or handover the business (reduced from 19%).
Richard Lambert, NHBF Chief Executive, says: “Business survival expectations have improved and are the most positive we have seen since we began these surveys three years ago. Nearly three quarters (72%, up from 64%) are now confident of their survival. However, there is still a significant number of businesses (25%) who are not sure whether they will survive over the next six months, which demonstrates the impact of the energy crisis. We are continuing to speak to the government and Ofgem about addressing the behaviour of some of the major suppliers in the non-domestic energy market.”
The survey received 510 responses between 26 June to 10 July 2023. It gathered views from a good 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 (90%) of respondents were salon or barbershop owners. 10% were self-employed individuals, 6% of which are 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.
Want to remind yourself of all of the findings from the previous NHBF State of the Industry Survey? Check it out here.