New York, NY (PRWEB) May 07, 2014
The Hair Salon industry has managed to untangle its recessionary knots. Rising consumer sentiment and per capita disposable income have boosted industry growth over the five years to 2014. This has also led to increased demand for ancillary services to standard haircuts, such as hair modification treatments (e.g. straightening procedures and perms), skin care services and massages. However, mounting demand for at-home color treatments from drug and beauty stores has challenged operators to redefine their indispensability to consumers as the economy continues to recover. According to IBISWorld Industry Analyst Sally Lerman, “Industry revenue is expected to increase at an average annual rate of 1.9% to $41.2 billion over the five years to 2014.” As consumers have returned to their prerecessionary spending habits since 2010, revenue is estimated to increase 1.5% in 2014.
With a high rate of unemployment at the start of the period, some job seekers turned toward establishing themselves as nonemployer firms to help make ends meet through the economic downturn. As a result, the number of industry establishments has increased over the past five years at an average annual rate of 4.9% to 1.0 million. Low barriers to entry and a stable customer base have contributed to this increase as well. Profit margins have also been on the rise, surpassing prerecessionary levels. This is due to increased sales of high-priced luxury services, such as permanent hair texture modification and more-efficient management of expenses.
In the five years to 2019, the industry is forecast to exhibit more steady growth. Per capita disposable income and consumer confidence will keep rising as the unemployment rate continues to decline, providing consumers with more discretionary income for luxury services at hair salons. “With a greater amount of discretionary funds, consumers will be able to enjoy salon services instead of less-expensive, drug-store products,” says Lerman. Additionally, eco-friendly products are expected to become more prevalent as more consumers opt for a sustainable-living lifestyle. Revenue is expected to increase over the next five years.
The Hair Salons industry is categorized by low market share concentration. As the largest company in the industry, Regis Corporation generates just 3.9% of total revenue and is still 60.0% larger than the next-biggest company. The Hair Salons industry is highly fragmented, with most operators located in high-traffic areas but others located in niche markets. Additionally, low barriers to entry allow small companies to set up locations without the backing of larger operators. The fragmented nature of this industry makes it difficult for any one company to gain a large share of the industry. This is highlighted by the dominance of nonemployers in the industry, which account for over 90.0% of industry enterprises and over 50.0% of total revenue.
For more information, visit IBISWorld’s Hair Salon in the US industry report page.
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IBISWorld industry Report Key Topics
The Hair Salon industry includes salons that primarily offer hair care services such as haircutting, hair coloring and hairstyling services. Additionally, these companies may provide facials and makeup applications (except permanent makeup) and retail beauty products. This industry does not include operators that primarily offer training in barbering or hairstyling.
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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