The National Hair and Beauty Federation this week released an in-depth research report, in collaboration with independent economic analysts Pragmatix Advisory, into the effects of the pandemic on the hair and beauty industry.
The report details the current situation for the industry, the strength of the sector prior to the pandemic and the urgent measures required to ensure that the majority of the industry survives.
Findings include:
- With over 140 days of lockdown closure in 2020, the hair and beauty industry has been one of the most impacted sectors by coronavirus measures. Hair and beauty businesses saw an average loss in turnover of 45 per cent in 2020, and as much as 57 per cent in some regions. Out of lockdown, social distancing measures mean that, even when open, they are operating at around 70 per cent pre-pandemic capacity.
- Despite the furlough scheme, full-time equivalent employment numbers were down by 21 per cent on 2019 as staff hours were cut, redundancies made and workers left for roles in other industries with more reliable wages.
- Overall, owners of hair and beauty businesses took an average cash hit of £17,000 in 2020, with those over the VAT threshold suffering disproportionately.
- Across the industry, one in ten businesses will have failed to deliver any income or dividend return to their owners or owner-managers. Many in the industry are now acutely vulnerable to failure, with three-fifths of businesses having no cash reserves entering 2021.
- Businesses will be out-of-pocket on average to the tune of £41,000 because of Covid by the end of 2021.
- The smallest enterprises will have lost the equivalent of 29 per cent of 2019 turnover, while the cash position of the largest will be down by 42 per cent of pre-pandemic annual revenues.
The NHBF is proposing the following in their attempt to fight for the industry going forward:
- A Personal Care Fund for hair and beauty businesses forced to close. This would support hair and beauty businesses through their immediate cash-flow crisis and help them begin their journey to recovery.
- Reducing VAT to 5% would help businesses recoup their losses and recover.
The NHBF is working with Save Our Salons to mobilise those across the hair and beauty sector and beyond to contact their local MPs, share their campaigning journeys on social platforms and to make their voices heard.
For more information and to read the full report, please click here. To watch the NHBF YouTube video detailing the report findings please click here.
