The latest State of the Industry Survey by the National Hair and Beauty Federation (NHBF) paints a picture of slow but steady recovery for the sector. The survey, conducted in April 2024, reveals that businesses are navigating ongoing challenges, particularly with rising wage and energy costs.
Profit and Pricing Trends
There has been a slight improvement in profitability, with 45% of businesses reporting a profit, up from 40% in January. Meanwhile, 43% are breaking even. A significant trend over the past three months has been the increase in prices, as 66% of businesses have raised their prices, compared to 39% in January. Looking ahead, 46% plan to raise prices further, although this is down from 64% at the start of the year.
Continued Reliance on Government Support
The survey indicates that more than half of businesses (56%) remain reliant on government support, a figure that has stayed consistent since January. This highlights the ongoing need for financial assistance to help businesses stay afloat during these challenging times.
Rising Business Costs and Responses
The top concern for businesses is the increase in the National Minimum Wage and National Living Wage, which worries 75% of respondents, up from 67% in January. Energy costs are the second biggest concern, affecting 61% of businesses.
To cope with these rising costs, 57% of businesses are increasing prices, 41% are holding off on hiring new staff or apprentices, 23% are delaying investment plans, and 22% are reducing staff hours. These measures highlight the tough decisions businesses are making to manage expenses.
Staffing and Recruitment Challenges
Staffing levels have remained stable for 63% of businesses over the past three months, mirroring January's figures. However, recruiting new staff has become more difficult, with 73% of businesses finding it harder to hire compared to a year ago. Despite this, recruitment intentions remain low, with only 16% planning to hire new staff and 14% looking to take on apprentices in the next three months.
Future Outlook
Turnover expectations are slightly more positive, with 34% of businesses expecting an increase, up from 30% in January. Confidence in business survival over the next six months is high, with 74% of businesses feeling optimistic, though a quarter remain uncertain.
Growth intentions are steady, with 41% of businesses planning to expand either rapidly or moderately. Meanwhile, 14% are considering downsizing or handing over the business.
Key Insights and Calls for Support
The survey highlights the sector's slow recovery, with businesses grappling with increased wage and energy costs. The ongoing difficulty in recruiting skilled staff and apprentices remains a significant concern. The NHBF emphasises the need for continued government support, particularly in making the £60 million additional apprenticeship funding more accessible and providing greater flexibility in the apprenticeship levy.
The NHBF is calling for collaborative efforts to address these challenges and support the sector's growth and stability; with many businesses shifting towards self-employment models, finding new ways to support salon employers is crucial for the industry's future.