The UK hair and beauty industry is set to experience steady economic growth over the next five years, according to new market research data. Despite facing economic challenges and rising living costs, the sector is projected to generate revenues of £4.6 billion, based on analysis by Vagaro, a leading provider of salon and spa software.
This positive outlook comes after a period of decline during the pandemic. Recent data from IBISWorld, a prominent industry research database, suggests that the hair and beauty sector is resilient, with 85% of salons recently increasing their prices to counteract inflationary pressures.
A recent survey conducted by Vagaro among UK hair and beauty professionals reveals significant impacts from inflation. Nearly half of the respondents reported an increase in wholesale costs by more than 10%, with 45% seeing a rise of 5-10%. Only 4% experienced a cost increase of less than 5%.
To maintain high service standards and ensure business continuity, many professionals have taken proactive measures. About 39% of respondents have tapped into their savings, while 16% have sought new lines of credit or business loans over the past year.
Fred Helou, CEO of Vagaro, emphasised the importance of flexibility and support for business owners in these challenging times. “Despite economic fluctuations, it is crucial for service providers to have adaptable solutions. Vagaro’s capabilities, such as deposit requirements for bookings and our new flexible funding option, Vagaro Capital, are designed to support business owners and enhance their operational resilience.”
Vagaro Capital offers revenue-based funding with flexible repayment options linked to future sales, providing businesses with immediate access to the funds needed for growth or improvements.
The survey also highlighted that core services, such as haircuts, colour, and highlights, continue to dominate, accounting for 55% of annual industry revenue. Nail-care services follow at 16.4%, with product sales contributing 14.9%. Vagaro’s data indicates a 23% increase in bookings for women’s haircuts and a 20% rise for men’s haircuts in 2023.
Despite the economic pressures, the demand for beauty services remains strong. The majority of surveyed professionals did not report a decrease in service bookings. This trend aligns with the “lipstick effect,” a theory suggesting that consumers maintain spending on beauty and self-care even during economic downturns.
Vagaro’s platform data reflects this resilience, showing a 159% increase in beauty and hair appointments year-on-year. Significant growth was observed in London (+71.8%), South Croydon (+67.1%), Ilford (+22%), and Reading (+6.9%).
Val Garland, a globally renowned beauty expert and Vagaro Brand Partner, noted, “In today’s economic climate, consumers are inclined to invest in beauty experiences. The desire for luxury and pampering remains strong, as people seek comfort and a sense of well-being.”
Similarly, award-winning skincare expert Lisa Franklin highlighted the role of beauty services in enhancing self-esteem and mental health. “Self-care and relaxation through beauty treatments can significantly impact a person’s self-image and mental well-being, particularly during tough times.”
While some businesses have reduced their inventory and operating hours, many have turned to promotional strategies such as social media marketing, text and email campaigns, and special offers to maintain customer engagement.
For industry professionals, Vagaro’s salon and spa software offers valuable marketing tools and business management features to navigate fluctuating market conditions effectively.
For more information on how Vagaro’s solutions can help streamline salon and spa operations, visit their website.
Contributed by: Business Wire