Rising costs continue to impact hair and beauty sector
Posted on in Business News
The latest quarterly State of the Industry survey from the National Hair & Beauty Federation (NHBF) shows that the recovery of the sector was slow and steady through 2023 and into January 2024.
Resilient sector businesses, though, are still under pressure from sticky inflation, high winter energy costs, rising wage costs in April 2024 and the lack of availability of experienced staff to grow their business.
Whilst the sector continues to make a slow and steady recovery, there has been a slight rise in businesses making a loss which is up 6% from September 2023, with 20% of businesses now reporting losses and 40% of businesses making a small or good profit - down 5% from September last year.
The trend towards increasing prices continued to slow with 39% of businesses doing so over the previous three months, down from 55% in September 2023.A further 64% of businesses will raise their prices over the next three months.
Reliance on external support remains high but is stable, with over half of businesses (58% up slightly from 56%) partially or completely reliant on Government support.
High energy costs are continuing to affect the sector, two thirds of the sector are paying for more energy than they were six months ago. When the Energy Bill Discount Scheme ends on 1st April, half of the businesses (49%) will see their costs increase by a further 20% and for two thirds of the sector they will be set to rise by up to 40%.
Caroline Larissey, NHBF chief executive says:
“The sector recovery is slow, but of most concern is the dip in businesses intending to take on staff and apprentices, as we rely on a pipeline of young talent entering our sector. Ahead of the Spring Budget on 6 March, we are calling on the government for further targeted sector support in the form of VAT reform (either reducing the rate, raising the threshold or tiered rates) and further support to employers through apprenticeship incentives.
With this support we are positive that our sector will continue to demonstrate resilience and the ability to weather the storm.”