As disposable incomes improve, consumers will resume spending on industry services.
New York, NY (PRWEB) March 16, 2014
The Hair and Nails Salons industry expanded over the past five years, due to robust consumer spending on discretionary personal care products and services. In the five years to 2014, revenue is expected to increase at an annualized rate of 2.6%, reaching $50.2 billion. In addition to standard haircuts, many salons offer facials, hair modification treatments (e.g. perms and straightening procedures), massages and deluxe spa manicures and pedicures. With widespread unemployment during the period, consumers were less willing to spend money on such high-cost discretionary services, opting instead for basic haircut services. Customers also decreased the number of salon visits, prolonging the time between appointments. These changes in purchasing patterns caused revenue to dip slightly during the recession. However, declining unemployment and an increasing number of new products and services in recent years have favorably impacted Hair and Nail Salons industry revenue, causing demand for industry services to rebound with revenue growth of 1.9% in 2014.
According to IBISWorld Industry Analyst Sally Lerman, “In the past five years, companies have continued to enter the industry, attracted to its stable consumer base and low barriers to entry.” In the past five years, industry enterprises have increased by an annualize 5.5% to reach 1.3 million companies. This has been caused by a rising number of nonemployer companies and nail salons entering the industry. This industry is also highly fragmented, with the top four companies controlling less than 10.0% of the market share. In fact, more than 92.3% of operators do not have employees. Profit margins have also begun to increase postrecession, due to rising service prices and improved spending on high-margin merchandise and services.
“Over the next five years, the industry is expected to post robust growth,” says Lerman. This is because declining unemployment during the period is expected to drive per capita disposable income growth. Equipped with larger budgets, consumers will likely favor professional salon products and services over less costly alternatives sold at drugstores. Meanwhile, environmental concerns are expected to become more prevalent during the next five years, which will lead to salons offering a wider array of eco-friendly products that appeal to emerging consumer preferences. More specifically, toxic-free products will prove to be a healthy benefit for hair and nail salons, as well as for staff and patrons.
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
The Hair and Nail Salons industry comprises salons that primarily offer hair and nail care services. In addition to retailing beauty products, these companies may also provide facials and makeup applications. This industry does not include operators 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
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