Salon Closures Expected as a Result of the Cost of Living Crisis

With the cost of living dramatically increasing and the looming of winter energy bills, BABTAC (The British Association of Beauty Therapy & Cosmetology), warns that there will be devastating implications for the beauty industry, with an anticipated influx of business closures.

The impact of rising energy bills

Speaking to its members, BABTAC found that 93.58% of salon owners had seen a considerable increase in utility rates in the past year, with 10% of these facing a 200% increase, 40% a 100% increase and 44% a 50% increase. Increases that are set to impact the consumer as treatment prices are set to increase as a result.

Lesley Blair, CEO and Chairperson of BABTAC says, “The cost-of-living crisis and rise in energy prices is affecting everyone and is of course a huge concern for many beauty businesses. Although some initial government support was announced last week, we’re hearing from our members that despite this, the hike in bills is just another blow to those who have already had to contend with negative impact of the pandemic, which was estimated to be an average financial loss of £11,603 on earnings2.

To find a cheaper energy rate, businesses are having to become savvier when choosing their provider, however it seems this isn’t so easy to navigate in the uncertain climate. Gemma Holt, owner of Lily’s Beauty Salon commenting, “The difficultly we experienced when trying to switch energy suppliers this time around, was that there were very few companies that wanted to supply us as a business! One company even agreed a price, only to later say they could not supply us due to the fact we are a beauty salon, and therefore considered too high risk!”

Low consumer confidence in the economy is resulting in lost custom which could mean business closure

It’s not only rising costs that are affecting beauty businesses, but also consumer spending - with news of energy price hikes looming for households ahead of the winter, according to Dija Ayodele, Aesthetician, and founder of West Room Aesthetics, consumers are less likely to invest in luxuries such as beauty treatments. 

“We operate in the lifestyle sector of the economy meaning that beauty is one of the first things to cut if the cost of living is high,” she says. “Many business owners that I speak to, are already facing unforeseen mounting bills and are having to increase prices, resulting in cancellations from regular customers with some facing the prospect of job losses and even imminent closure should the situation not improve”

Safety risks for consumers as they opt for cheaper, unregulated treatments 

With purse strings tightening, there are also concerns that consumers may decide to book in for low-cost treatments with non-accredited establishments that may pose a risk to their safety or attempt at-home DIY beauty.

Dija Ayodele says, “I worry that because of dropping confidence in the economy, consumers will opt for cheaper treatment solutions that may pose risks to their health.” 

Lesley Blair agrees and says, “You pay for standards and unfortunately cheaper treatments could potentially means lower quality, be this in terms of qualification, products, or insurance. The concern is that with the price of treatments increasing, consumers will instead seek out lower cost alternatives or DIY treatments and with so much of the beauty industry largely unregulated, it’s more important than ever to do proper research before trusting a therapist or buying a DIY beauty treatment. If something seems too good to be true it often is, so we strongly recommend if you have any doubt to seek a professional’s advice”