Is there light at the end of the tunnel?

July 27, 2023

The latest State of the Industry survey from the National Hair & Beauty Federation (NHBF) shows that, whilst there is an overall feeling of positivity in the industry, there are still several factors creating a negative and damaging impact on many businesses.

The improvement we saw in April 2023 has persisted, with 43% of businesses making a small or good profit, 42% breaking even and much fewer making a small or substantial loss. There is also good news for clients, as the general trend towards increasing prices seems to be slowingOver the previous three months, nearly half (55%) of businesses raised their prices, with the other half (52%) saying they will do so over the next three months.

Prices are rising because businesses are having to respond to the continued increase in costs. Unsurprisingly, energy costs are still at the top of business concerns (79%), followed by increased cost of trade supplies and increases to National Minimum Wage/National Living Wage (NMW/NLW).

Debt is still a problem for over half (56%) of sector businesses. For 38% of these, the debt has risen significantly, with more than half (55%) believing it will take over two years to clear. As a result, reliance on external support remains steady; over half of businesses (56%) are still partially or completely reliant on government support.

In better news, staffing and recruitment intentions have now improved, with 28% of employers stating they are definitely or likely to take on new staff – up from 21% in April.

In another more positive turn, almost a quarter (23%, up from 15% in April) of businesses are definitely or likely to take on apprentices in the next three months. Whilst the proportion of businesses intending to remain the same size (42%) is similar to the previous survey, only 15% are planning to downsize or handover the business, this is reduced from 19%.

“Business survival expectations are the most positive we have seen since we began these surveys three years ago. Nearly three quarters (72%, up from 64%) of businesses are now confident of their survival. However, there is still a significant number of businesses (25%) who are not sure whether they will survive over the next six months, which demonstrates the impact of the energy crisis.  We are continuing to speak to government and Ofgem about addressing the behaviour of some of the major suppliers in the non-domestic energy market.” – Richard Lambert, NHBF Chief Executive

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