25 February 2022

 

As the National Hair & Beauty Federation publishes the latest State of the Industry Report, it has laid out a list of actions required from the government to ensure that hair & beauty salons and barbershops are given the best chance to recover following the devastation caused by the pandemic. 

The previous survey in September showed growing evidence of sector resilience and businesses getting back on their feet, but the emergence of the omicron variant and renewed restrictions across the UK over the winter has had a chilling effect:

  • 42% are breaking even. However, nearly 40% are either making a small or substantial loss with and only 19% making a small or good profit (this was previously at 43%)
  • Around 32% of respondents raised their prices over the last three months (down from 40%).  A further 58% will do so over the next three months (up from 40% previously)
  • A significant 81% of businesses are either partially or completely reliant on Government support to continue trading (up from 66% - similar to the July 2021 figure of 80%). 
  • More than half of businesses (54%) have debt; the level of debt has increased from 52% over the last 12 months and more than two thirds (68%) have used personal savings to keep themselves going.

Staffing, recruitment and apprentices:

  • In the next three months, only 15% are definitely or likely to take on new staff (down from 27% in September)
  • Over the last three months, 18% have cut back on apprentices and only 7% will definitely or are likely to take on apprentices in the next three months.

 

Looking to the future:

  • Business confidence in the sector has weakened, with only 40% confident of their survival (down from 63% in September) and a significant 52% not sure. This is close to the lowest confidence point we have recorded, in November 2020, and the most uncertain that businesses have been since the survey started.
  • However, growth intentions are similar to the green shoots shown in September. Over 40% say that they intend to grow their business, 41% remain the same size and 17% downsize or handover the business. 

 

The NHBF is therefore calling for the following:

  1. The reintroduction of the Job Retention Bonus through to the summer of 2022 and restraint on further increases to the National Minimum Wage and apprenticeship rate until such time as the sector can continue its recovery. 
  2. An increase in the 50% discount on business rates for 2022-23 and flexibility on repayments of CBILS (Coronavirus Business Interruption Loan Scheme) and bounce back loans to offer much needed support to those suffering financial hardship.
  3. More attractive apprenticeship incentives to employers, focusing on the development of affordable apprenticeship schemes specifically for small businesses in order to make it financially viable for them to recruit and retain apprentices. 
  4. A commitment to make financial support via local authority Additional Restrictions Grant (ARG) and grants in the nations available to businesses as soon as possible with further support reviewed as any future restrictions are introduced.
  5. Continued consultation between the sector and UK and devolved governments to tailor current and future guidance in a clear and accessible way with more forward thinking to plan and implement any future changes giving businesses adequate time.
Richard Lambert, NHBF chief executive said, “Ours is a sector that continues to show some optimism for the future despite all that the pandemic has cost businesses. We are confident that with continued support from each national Government, further UK Government support into the spring and incentives for apprenticeships that the personal care sector will recover to play an important role in the UK’s sustainable economic recovery, the future of high streets and people’s wellbeing. But without that support, jobs will be lost and many well-established, but now deeply indebted businesses that have exhausted their reserves, will close.”

The survey received 2,851 responses between 10-19 January. It gathered views from a sizeable representation of businesses in the personal care sector across allareas 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. Nearly 70% of respondents were salon or barbershop owners. 51% 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 them being a salon or barbershop owner.

In 2019 the NHBF reported that UK’s 45,000 salon business’ (hair, beauty and barbershops) delivered a combined turnover of £8 billion.