Hairdressing and Beauty Salons in Australia Industry Market Research Report Updated by IBISWorld

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The Hairdressing and Beauty Salons industry provides discretionary services, and is thus sensitive to movements in household disposable income. The global financial crisis contributed to a flat performance over the past five years. Haircutting and styling services account for an overwhelming share of industry revenue, largely influencing trends in performance. Hence, the low growth rate does not represent the strong performance in other segments, such as hair restoration. Higher revenue growth is expected in 2011-12 as the economy continues to strengthen. For these reasons, industry research firm IBISWorld has updated its report on the Hairdressing and Beauty Salons in Australia industry.

IBISWorld Market Research

IBISWorld Market Research

The large number of hair and beauty salon operators promotes a high level of competition.

Recent performance has been flat in the Hairdressing and Beauty Salons industry. In the five years through 2011-12, revenue has grown an annualised rate of only 0.9% to reach $3.8 billion this year. According to IBISWorld industry analyst Nick Sallmann, “industry revenue is most sensitive to movements in household disposable income as the industry provides a discretionary service.” Due to the global financial crisis, industry revenue declined in 2007-08 and 2008-09, thus contributing to the low growth in the five years through 2011-12. Revenue is expected to increase by 2.3% in 2011-12. Haircutting and styling services account for an overwhelming share of industry revenue, largely influencing trends in performance. Hence, the low growth rate does not represent the strong performance in other segments like hair restoration. Similarly, negative influences like the falling number of solarium beds have held back revenue growth.

Market share concentration in the Hairdressing and Beauty Salons industry is low. The industry is highly fragmented with most companies being small, owner-operated businesses. The resulting fierce competition is creating high entry and exit rates. Sallmann adds, “the battle for customers is putting downward pressure on prices, forcing out many inefficient operators.” With profits driven down, the industry is experiencing its lowest number of registered hairdressing and beauty operators in the past five years. Besides the traditional hair salons, the growing number of independently owned or franchised day spas that offer beauty treatments is increasing competition in the industry. Despite the number of competitors, the slightest differentiation between operators can protect profit margins. While there are no major players, some chains exist (usually with no more than two or three shops) and a number of franchises, such as Just Cuts Franchising and Price Attack Franchising, have emerged.

Hairdressing and Beauty Salons industry performance is likely to be stronger over the next five years. However, future industry revenue growth is likely to be impeded by the difficulty of finding quality labour, particularly in the hairdressing segment. The growing gap between labour supply and labour demand is limiting revenue growth and is likely to create upward pressure on wages. If no remedial action is taken, this could restrain future profit growth and subsequently further reduce the number of operators in this business segment in the medium term. Despite the grim prognosis, it is anticipated that this segment of the industry will continue to expand over the next five years as labour market correction takes place gradually.

For more information, visit IBISWorld’s Hairdressing and Beauty Salons report in Australia industry page.

Follow IBISWorld on Twitter:!/ibisworldau

IBISWorld industry Report Key Topics

Practitioners of the Hair and Beauty Salons industry may engage in providing hair styling and removal, manicures and pedicures, skin treatments and tanning, cosmetic and beautifying services and non-medical hair restoration techniques.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit or call (03) 9655 3886.

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Gavin Smith
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