25 February 2025

The National Hair & Beauty Federation (NHBF) today released findings from its latest State of the Industry Survey, revealing that an unprecedented 78% of hair and beauty businesses plan to increase their prices in the next three months - the highest level recorded since the survey began.

The quarterly survey of sector businesses across the UK paints a picture of an industry at a crossroads, with rising operational costs post Autumn Budget forcing difficult decisions about staffing, apprenticeships, and business models.

Key findings include:

  • 52% of businesses plan to implement price increases of 5-10%.
  • 31% of businesses reported a decrease in their workforce over the last quarter.
  • 59% expect to reduce apprenticeship intake following the Autumn Budget.
  • 26% of businesses are now planning to downsize or hand over their business.

The sector has already seen significant job losses, with official data showing a workforce reduction of 16,500 positions in 2023-24, following a 7% reduction in staff in 2022/23.

The impact of the Autumn Budget has been particularly significant, in addition to taking on fewer apprentices, businesses will reduce staff or apprentice hours (47%), the number of staff employed (47%) and business investment (41%) in response to the 6.7% rise in National Minimum Wage rates and changes to Employers' National Insurance contributions.

Caroline Larissey, Chief Executive of NHBF, said: "The survey results paint a concerning picture of our sector's future. While the personal care services sector has grown its economic contribution to £5.8 billion in 2023-24, we're seeing a fundamental shift in how businesses operate. The combination of rising wages, increased National Insurance contributions, and reduced business rates relief is pushing many salon owners toward self-employed models, potentially ending decades of apprenticeship training that has been the lifeblood of our sector.

"Without urgent government intervention, particularly around VAT reform and targeted support for small employers, we risk losing the traditional salon model that has been central to high street vitality and community wellbeing. The NHBF is calling for immediate action, including a review of the VAT system, enhanced apprenticeship incentives, and improved business rates support to help protect and grow this vital sector."

The survey also revealed that 41% of businesses are currently making a profit, with 42% breaking even. However, the number of businesses reporting losses has increased to 17%, up from 14% in September 2024.

Look out for our ‘Straightening out the costs’; report analysing the impact of the Autumn 2024 Budget on Hair & Beauty Sector in the coming days - a comprehensive analysis commissioned by NHBF and conducted by Pragmatix Advisory Ltd.

NHBF has written to the Chancellor ahead of the spring fiscal statement on 26 March calling for VAT reform, apprenticeship incentives for employers and business rates reform.

The NHBF has also launched its "Survive & Thrive with the NHBF," a transformative programme designed to support members through these challenging times. This bold initiative provides month-by-month practical support including business adaptation tools, employment guidance, political engagement resources, and professional excellence development. The initiative will help businesses prepare for and navigate through the April 2025 changes and beyond.

Read the survey summary report here. 

Members can access these valuable resources through the " Survive & Thrive with the NHBF" section of the NHBF website.