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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 119,400 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 3 workers, and generates between $219,000 and $239,000 annually.00 and $301,000 annually.
- The hair care services industry consists of about 119,400 establishments that employ 352,400 workers and generate over $26 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
Coronavirus Update
May 17, 2022 - Services Spending Still Below Pre-Pandemic Levels
- With new COVID-19 cases down significantly from the peaks of the Omicron wave, many service economy firms, including hair salons and barber shops, hoped for a rebound in demand. However, consumer spending between goods and services has not yet returned to pre-pandemic balance, according to The Wall Street Journal. As of the first quarter of 2022, spending on goods accounted for about 35% of total consumer spending. Goods made up about 31% of consumer spending in the fourth quarter of 2019, just before the pandemic. For a return to goods versus services balance, goods sales would need to drop about 11%, and services would need to rise about 6%.
- Reopening safely increased salon and barbershop costs as they invested in automated trash receptacles, sterilizing equipment, additional soap and hand sanitizer dispensers, and thermometers. Adhering to distancing guidelines can decrease salon capacity. Time-consuming sanitizing efforts between clients can also reduce the potential volume of business.
- Salons may need to renegotiate rent/lease terms with landlords. Some salons pay rent based on a percentage of their profit. Some experienced stylists have opted not to return to their pre-pandemic salon workplaces and instead have rented private salon suites to make their customers, and themselves feel more comfortable.
- As clients return to salons, some stylists are helping people who suffered hair loss after having COVID-19. Two to three months after their initial diagnosis, some people experience hair loss. If salons notice an uptick in clients reporting hair loss related to COVID-19, they may research potential remedies or hairstyles that can help alleviate the problem.
- Some salon workers in the UK have reported clients who have had COVID-19 having allergic reactions to hair dye, according to the BBC. The Imperial College London is studying how the illness could affect the immune system, as some other diseases do. Hairdressers in the UK have begun doing patch tests on clients before applying hair dyes to help prevent allergic reactions, which have included rashes and burns.
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