As Covid-19 lockdown measures are eased in the coming weeks, many industries are now being forced to evaluate how – and if – they can function in a socially-distanced society, incorporating new rules that may need to remain in place for many months.
The Department for Business has announced that hairdressers and beauty salons will be allowed to re-open from 4th July. However, new findings by Plimsoll show 1 in 3 companies may be unable to cover the extra cost of running a socially-distanced, sterile salon. With many operating from small and independently-run premises, the prospect of re-opening safely presents a significant challenge, and tens of thousands of furloughed jobs in the market may be lost for good.
As in the hospitality sector, many small business owners have concerns that trying to function with new, strict limitations could be more financially damaging than remaining closed altogether. On top of running costs, implementing social distancing measures often comes at a price. In an industry involving close contact with customers, salons will need to be sanitised more regularly, purchase more disposable products and PPE for staff, and potentially serve lower volumes of customers at any one time.
The timing of the lockdown provided another blow to the beauty industry in particular, with the run-up to the summer holidays usually a hugely important part of the calendar for hairdressers and beauty salons. Industry analysis from Plimsoll Publishing found that more than 200 companies were already flagged as “in danger” before the crisis hit, so for some missing out on these essential profits could have serious consequences.
According to Samantha Ogden, Senior UK Analyst at Plimsoll, “hair and beauty salons are in a particularly difficult position. Already hit by declining footfall from the long-suffering high streets, they now need to remain profitable with fewer customers and lost time to make up for following the lockdown. Many feel that even if they are able to reopen soon, the impact of losing such an important part of the year will prove too much for some. Our studies show that the market already existed on thin margins and low sales-per-employee figures. We have modelled the long term financial health of the largest hairdressers and beauty salons and the warnings are all there: many pre-crisis jobs could be lost in the new market.”
The value of the beauty industry should not be underestimated. According to a 2019 report from the British Beauty Council, overall spending in the sector contributes more to Britain’s GDP than motor vehicle manufacturing. In 2018 consumers spent around £8 billion on beauty services alone. Now, combined with falling retail sales, beauty salon suppliers and even prestige brands are taking a hit from the current crisis, highlighting the potential knock-on effect of abandoning areas of the economy which are sometimes overlooked.
In order to re-open, beauty salons will no doubt need clear guidelines, and many have called directly for government action and support during the next “phase” of social distancing. While only time can show the full impact of the crisis, the approaches taken in other countries should already serve as an example, with Italy re-opening many beauty salons in recent weeks.
In the UK, many hairdressers and beauticians have been offering online tutorials and advice to help their customers through the lockdown. But the next stage of the COVID crisis is perhaps the most uncertain. In an industry that – unlike many others – is so difficult to replicate through a computer screen, the next few months will prove pivotal for many. While challenges will be faced across many industries, it is perhaps more important than ever to remember the essential role played by small businesses in both wider sectors and the economy as a whole; supporting them now could have a positive impact for years to come.
Follow the links to monitor the latest developments in the financial health of the beauty salons and beauty products industries, and to discover more about Plimsoll’s company and market analysis.