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 85,000 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 $270,000 annually.
- The hair care services industry consists of about 75,000 establishments that employ 445,000 workers and generate about $28 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
Apr 16, 2024 - Higher Growth Forecast for Industry
- The US hair care services industry is projected to grow at a CAGR of 6.2% between 2024 and 2028, according to a forecast 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 confidence levels have improved, which bodes well for other services industries, which include hair care services. Additionally, consumer sentiment has seen a degree of improvement following sustained lower levels. A broad recovery is underway for many in-person services that were affected when consumers were largely limited to their homes in 2020 and 2021. Factors that continue to limit spending are higher price levels and interest rates, though both are expected to improve in 2024. Post-pandemic, consumer spending has shown slower gains of 2.5% in 2022 and 2.2% in 2023, supported in part by savings amassed by households from federal pandemic relief programs.
- Consumer confidence levels were essentially unchanged in March 2024 from February 2024, after a dip in February following three consecutive months of growth, according to data from The Conference Board. The Conference Board’s consumer confidence index was 104.7 in March 2024 from 104.8 in February 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future.” Peterson added that confidence rose among householders 55 and over but fell for those under 55. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
- Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
- Hair extensions sales are expected to grow at 8% annually through 2031, reaching $5 billion in value, according to a new report by ResearchandMarkets.com in American Salon. Hair extension use is becoming more popular with consumers, with demand being driven by aspirational social media posts. According to the report, hair extension companies are developing more partnerships with salons, hair stylists, and media influencers to capitalize on the interest. In addition, companies say they are investing in research and development to improve product quality, address environmental impact issues, and combat the sale of knock-offs. The report surveyed 11 major extension companies worldwide to assess their sales and outlook.
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