As disposable incomes improve, consumers will buy the industry's professional products again
Los Angeles, CA (PRWEB) September 03, 2012
With industry operators giving their best efforts to offer services in line with changing consumer sentiment, the Hair and Nail Salons industry held steady against the recession. Over the five years to 2012, IBISWorld estimates that revenue increased at an average annual rate of 2.0% to an estimated $46.4 billion. In addition to standard haircuts, salons offer facials, hair modification treatments like perms and straightening, massages and deluxe manicures and pedicures. With persistent and widespread unemployment during the period, consumers were less willing to spend on these high-value discretionary services, opting for simply basic haircut services, says IBISWorld industry analyst Caitlin Moldvay. Consumers also decreased their number of salon visits, stretching out the time between appointments. These changes in purchasing patterns caused revenue to dip slightly during the recession. However, declining unemployment and a slew of new products and services in more recent years have favorably impacted industry revenue, causing demand for hair and nail salon services to rebound modestly and grow by an estimated 2.8% in 2012.
Over the past five years, companies have continued to enter the industry, attracted by its stable consumer base and low barriers to entry. Over the five years to 2012, industry growth averaged 5.9% annually to reach 1.1 million companies by 2012.
The Hair and Nail Salons industry is highly fragmented. In fact, more than 91.0% of operators do not have employees. Market share concentration within the industry is low. The industry’s major player is the Regis Corporation. Operators are spread across many locations to be close to key consumer markets in high-traffic locations. This trend makes it difficult for one company to serve a large portion of the entire market, says Moldvay. In fact, the industry is dominated by nonemployers, which make up over 91.0% of operators in the industry. This includes hair stylists and nail technicians that are sole proprietors and rent their booths from hair and nail salons.
Economic conditions are anticipated to improve over the five years to 2017, with revenue forecast to increase. Declining unemployment during the period is expected to drive per capita disposable income growth. With greater disposable income, consumers will likely favor professional salon products and services over the cheaper alternatives sold at drugstores. Environmental concerns are expected to become more prevalent over the next five years, which will lead salons to offer a wider array of eco-friendly products that appeal to emerging consumer preferences. For more information, visit IBISWorld’s Hair and Nail Salons in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises salons that primarily offer hair care and nail care services. These companies also provide facials and makeup applications. This industry does not include companies that primarily offer training in barbering or hairstyling, nor does it include electrolysis, permanent makeup or tanning services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized 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 US 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 Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.