Hair Care Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 76,600 hair care service companies in the US, including beauty shops, hair salons, and barber shops, provide hair cutting, coloring, and styling services. Hair salons may also provide skin and nail care services. Barber shops may shave or trim men’s beards. Companies often sell hair care products. The vast majority of hair care service providers (95%) are beauty salons.
Competition For Ancillary Services
Beauty parlors compete with spas, nail salons, and physician’s offices for ancillary services related to skin and nail care.
Dependence On Skilled Labor
The reputation and success of an individual hair care establishment is highly dependent on the quality of service and staff.
Industry size & Structure
The average hair care service provider operates out of a single location, employs about five workers, and generates about $376,000 annually.
- The hair care services industry consists of about 76,600 establishments that employ 402,000 workers and generate about $28.8 billion annually.
- The vast majority of hair care service providers (95%) are beauty salons.
- The industry is highly fragmented; the top 50 salon firms account for 13.6% of total revenue.
- The hair care services industry includes national chains, franchises, and independent operators.
Industry Forecast
Hair Care Services Industry Growth
Recent Developments
Oct 17, 2024 - Prices Up for Haircuts
- Prices for haircuts and other personal care services were 4.8% higher in September 2024 compared to the previous year and up 0.1% compared to the previous month, according to Consumer Price Index data from the Bureau of Labor Statistics (BLS). Per the BLS, hair care services employment was flat in July 2024 compared to a year ago. Average wages for nonsupervisory employees in the hair, nail, and skin care services industry grew almost 2% in July 2024 year over year, reaching $24.40 per hour. Consumer spending, a key indicator for the industry, grew 2.6% in June 2024 compared to a year ago and increased 0.2% from the previous month, according to the Bureau of Economic Analysis.
- The US hair care industry is projected to grow at a CAGR of 5.8% between 2024 and 2028, according to a forecast for the “Other Services Sector” from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy‘s anticipated growth. The report noted that consumer spending, along with expenditure by businesses, drives the other services sector. Consumer confidence is expected to improve in the forecast period, which bodes well for the various other services sector. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest rate levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025.
- According to the Wall Street Journal, costs of haircuts and other personal care services have risen by over 27% from 2019 to 2024 per the consumer-price index, as salons pass on higher labor costs and product prices to customers. An example of a service with a price jump even higher is balayage service in New York, which has increased from $168 in 2021 to $289 in 2024, 72% higher over the period, per booking platform Booksy. Some salons and stylists now charge for formerly free services like blow-drying or styling, while others strictly enforce fees for appointment cancellations. In addition, salons are also taking advantage of in-demand styles popular on social media by charging more for trending looks, which often are more complex and time-consuming for stylists. Customers, meanwhile, are taking steps to cut back where possible by reducing their salon visits, washing their hair before an appointment, or skipping add-on services, per the WSJ. Sometimes, customers choose a lower-priced junior stylist to offset the cost of expensive services such as highlights and hair coloring.
- Three quarters of US adults have made a beauty-related purchase for themselves, including beauty services, products, and procedures, according to a NerdWallet 2024 Cost of Beauty Report. Respondents who made beauty-related purchases reported spending on skin care products (54%), hair products (41%, not including shampoo or conditioner), cosmetic purchases (39%), nail salon treatments (33%), hair salon treatments (30%), hair removal (19%), cosmetic dental procedures (19%), skin spa treatments (18%), nonsurgical cosmetic procedures (7%), cosmetic surgeries (7%), or other (3%). Nearly 60% of parents reported making beauty-related purchases for their children, including skin care products (29%), hair products (27%), and nail salon treatments (21%). Payment methods varied for the purchases. About 59% of beauty purchases were made with cash or a debit card, 39% a credit card paid off in full by the due date, 21% savings, 14% a credit card that was not paid off in full by the due date, 11% insurance, 10% used loan product from the provider of the service/product, 9% buy now pay later services, 6% FSA/HAS, and 1% some other way.
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