Sector overview

Turnover trends

According to government statistics, consumers' annual expenditure on hairdressing and beauty care currently stands at over £3.8 billion.

Expenditure increased considerably during the latter half of the 1980s, from £1,300 million in 1985 to £1,848 million in 1989 (see Statistics: Table 1). Market expansion occurred primarily as a result of strong economic growth during this period, which stimulated consumer spending on luxury items and services.

Market growth slowed as a result of economic recession during the early 1990s. Many consumers reduced the frequency of visits to a hairdressing salon, as well as forgoing expensive, non-essential treatments. Some consumers opted for 'do it yourself' hair styling products as a means of reducing expenditure.

Despite subsequent economic recovery, consumers' expenditure on hairdressing and beauty care remained more or less static in real terms between 1990 and 1996. A lack of growth during this period was contributed to by the following factors;

• continuing consumer caution; many consumers remained reluctant to spend large amounts of money on non-essentials
• demographic trends (see Statistics: Table 2), towards an ageing population; older people are often less interested in fashions and are less likely to spend large amounts on expensive hair styles
• a general decline in capacity; the number of employees within the sector fell sharply during the mid 1990s (see Statistics: Table 3), as a result of low wages, business failures and under-investment in recruitment, training and development, and has yet to recover fully

Conditions improved during 1996 and consumers’ expenditure on hairdressing and beauty care exceeded £2.85 billion in 1997, stimulated by a more buoyant and stable economy. Growth continued throughout 1998, despite a general economic slowdown and a continuation of the trend towards an ageing population. A strong resurgence of the economy and continuing growth in demand for personal services during 1999 and 2000 boosted sector growth further, with expenditure increasing by an estimated 17% between 1998 and 2000. It is estimated that consumers' expenditure saw further, albeit less substantial, growth in 2001, despite a general slowdown in the economy during that year.

Nevertheless, the Hairdressing And Beauty Industry Authority (HABIA) considers that sector growth may have been prevented from reaching its full potential during the closing years of the 1990s and early 2000s by an industry-wide skills deficit and by a general lack of business skills and training among salon proprietors. Low pricing also continues to be a barrier to industry growth.