IBISWorld Market Research
The decline in solarium numbers will continue, with most states having banned solariums from 1 January 2015
Melbourne, Australia (PRWEB) March 26, 2015
The Hairdressing and Beauty Services industry has exhibited modest growth despite turbulent economic conditions. Over the five years through 2014-15, industry revenue is expected to grow by an annualised 0.9%. Many of the industry's services, including nail care, hair colouring and tanning, are discretionary. Therefore, demand for these services wanes during periods of economic uncertainty or when employment levels falter. However, growing stability in global markets is expected to have provided a boost for the industry, with revenue forecast to grow by 1.8% in 2014-15 to reach $3.9 billion. Industry segments have exhibited varying levels of success over the past five years. The haircutting, styling and colouring segment has maintained relatively stable growth. This segment accounts for the majority of industry revenue and has the largest influence on the industry's performance. Other segments such as hair removal services have performed strongly, as have diversified beauty salons that operate across a range of segments. However, the indoor tanning and spray tan services segment has declined as a share of revenue due to a combination of regulatory changes and media coverage of the dangers involved in solarium tanning. According to IBISWorld industry analyst Stephen Gargano, “the decline in solarium numbers will continue, with most states having banned solariums from 1 January 2015.”
The industry is highly fragmented with low barriers to entry. It is highly competitive, with a large number of small operators, and high entry and exit rates. “The battle for customers has put downward pressure on prices, forcing many inefficient operators out of the industry,” says Gargano. External competition has been increasing, as day spas, hotels and even airports have been offering a growing range of hair and beauty services. Operators have sought to promote higher margin services in order to bolster profit margins. The industry is expected to continue its modest pattern of growth over the next five years. Higher grooming standards for men and an increase in baby boomers seeking to slow the ageing process are projected to support industry revenue growth. However, price competition is expected to constrain overall revenue growth, while rising wages will push down profit.
The Hairdressing and Beauty Services industry has a large number of small, independent operators. It is, therefore, characterised by a low level of market share concentration. Some chains exist within the industry, but usually with no more than two or three shops. A number of franchises have also emerged recently, which is a trend that is expected to continue. Low industry barriers to entry, little regulation and licensing, and the relatively small capital outlay required to commence operations will continue to be the main factors contributing to low market share concentration.
For more information, visit IBISWorld’s Hairdressing and Beauty Services industry in Australia report page.
Operators in this industry primarily provide hairdressing or beauty services, such as manicures and pedicures, facials, skin treatments, tanning, make-up application, hair removal and non-medical hair restoration techniques.
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