High street hair and beauty salons have warned they are particularly at risk of going out of business as energy prices soar, given the cost of running appliances such as hairdryers, tongs and tanning beds.
Just under half — only 49 per cent — of almost 700 businesses surveyed by trade body the National Hair and Beauty Federation last month said they were confident in the survival of their business. More than half have raised prices for customers and 77 per cent are paying more for energy than they were six months ago.
“The slam of that huge jump is just pushing many people towards the brink,” said chief executive Richard Lambert. He added that businesses were now experiencing 300 to 400 per cent increases in their bills, while a number of salons had already closed their doors.
Many sectors have raised fears about surging energy bills this winter but high street salons and spas are particularly worried, given they must fund the cost of running numerous electrical gadgets as well as heating and lighting. The fragmented nature of the market, with the majority of salons turning over less than £250,000 a year and employing no more than five to 10 people, according to ONS data, leaves them exposed.
Former prime minister Liz Truss announced an energy support package for businesses in September, but help is currently set to run out in April. Salons are worried that without additional support, high bills will hammer the low margin sector as the cost of living crisis bites.
“As a sector full of small and micro businesses that are very fragmented, we may find it difficult to convince the government that this is a vulnerable industry,” said Lambert.
David Paling, the owner of Tan Tan Tan, a chain of 10 tanning salons, warned that without further support from the government, spiralling bills could sound the “death knell” of one of his outlets.
He said bills for his Cardiff salon had gone up more than fivefold since April after its fixed-term contract ended in October.
“When you take one of your largest overheads, and you multiply it by six, you kill the salon, that’s done . . . the business stops at that point,” he said. “Without government help, it closes.”
One salon responding to the NHBF’s survey warned that its monthly energy bills were likely to increase from £113 to between £600 and £700. “If that’s the case, we’ll turn the lights off as we leave the building and give the keys back to the landlord,” the unnamed respondent said.
Gilly Perkins, general manager of trade body The Sunbed Association, said some smaller businesses had already closed their doors due to the high costs of running tanning beds “all day every day”.
“For the smaller businesses, there’ll be some very serious conversations going on about whether or not those businesses can remain viable,” she said, particularly after the hit from pandemic closures.
“There are people that I think were hanging on in there, thinking we’ll just see how this next year goes, and if it becomes too much of a challenge they’ll decide the business won’t be viable.”
Steph Stevenson, the owner of HNB Salon in Bournemouth, said she was concerned about energy blackouts. The salon has switched to disposable towels as a result of the costs associated with washing and drying and has increased prices for customers by 20 per cent.
“You can’t afford not to, it’s business suicide not to raise your prices,” she said.