Sector overview

Outlook and prospects

Buoyant economic conditions and an upsurge in interest in personal grooming and appearance resulted in a sustained period of market growth during the closing years of the 1990s and throughout 2000. However, 2001 saw the beginnings of an economic downturn which continued into 2002, giving rise to a more uncertain economic climate.

By mid 2002 the threat of imminent global recession appeared to have eased, with some commentators suggesting that a significant recovery would begin in 2003. However, further substantial growth in the hairdressing market appears unlikely to occur during the next few years even if the economy does experience an upturn. This is due to the lack of any prospect of an increase in demand, coupled with continuing price sensitivity at the lower end of the market.

Nevertheless, hairdressing is to some extent a 'recession proof' industry, particularly at the lower end of the market, as it is regarded by many as an essential personal service. Furthermore, some modest growth may be stimulated over the next few years by the following:

• further increases in the number of working women
• greater interest in personal appearance among pre-teen children (particularly girls) as a result of the 'kids growing older younger' phenomenon
• growing demand for anti-ageing treatments

Corporate Intelligence on Retailing projections in Consumer Goods UK suggest that consumers’ expenditure on hairdressing will experience only modest growth in real terms over the next few years, increasing by an average of only 2% per annum at constant 1995 prices between 2000 and 2005.

Some members of the industry are concerned that any future growth will be undermined by a serious skills shortage, resulting from low wages and long term under-investment in recruitment and training (particularly in the area of business management).

The nature of demand for hairdressing services may in the medium to long term be affected by demographic trends, towards an ageing population (see Statistics: Table 3). Older clients tend to favour different hair styling techniques and may be less inclined to spend large amounts of money on expensive, up-to-the-minute styles. Current trends suggest that an increasing number of salons will diversify into the related areas of beauty treatment and anti-ageing therapy.

State registration of professional hairdressers is compulsory in many European countries. Various organisations have for some time been campaigning for the introduction of a similar system in Britain, in order to maintain standards within the industry and to curtail the activities of untrained 'cowboys'.