1. Executive Summary

This annual Bella Bouji report provides a comprehensive analysis of the UK hairdressing industry in  2025, focusing on the key market dynamics, trends, challenges, and opportunities relevant to salon businesses and potential investors, including private equity firms. The report draws on extensive industry data and analysis to present a detailed picture of the industry’s current state and future prospects.

2. Market Size and Growth

The UK hairdressing industry is a significant contributor to the UK economy, with a market size of £5.8 billion in 2024 1. The market size in 2025 is projected to be £5.8bn 1. Despite facing challenges such as surging costs and weak consumer confidence in recent years, the industry is projected to grow at a compound annual rate of 0.6% over the five years through 2024-25 1. This growth is driven by factors such as easing inflation levels, higher consumer confidence, and an increasing demand for men’s grooming services 1.

The UK professional beauty services market is expected to grow at a CAGR of 6.6% from 2025 to 2030 2. This projected growth can be attributed, in part, to the industry’s resilience and adaptability in the face of economic fluctuations and evolving consumer preferences. The easing of inflation and increased consumer confidence have played a significant role in the industry’s recovery, encouraging consumers to spend more on hair and beauty treatments.

3. Industry Trends

Several key trends are shaping the UK hairdressing industry:

• Digital Evolution: An increased digital presence and a surge in independent beauticians have transformed the industry, driving businesses to innovate to attract and retain customers 1. This includes adopting online booking systems, mobile apps, and social media marketing.
• Male Grooming: The demand for men’s grooming services, including haircuts, styling, and coloring, has increased significantly, contributing to the industry’s growth 3. This trend reflects a growing awareness among men of the importance of personal grooming and appearance.
• Sustainability: Environmental sustainability is becoming increasingly important, with salons adopting eco-friendly products, sustainable packaging, and waste reduction practices 4. This trend aligns with the increasing consumer demand for ethical and sustainable products and services.
• Personalisation: Clients are increasingly seeking personalised services tailored to their individual needs and preferences, driving demand for bespoke hairdressing techniques and advanced training 4. This trend highlights the importance of client-centric approaches and customised solutions in the hairdressing industry.
• Technological Advancements: Technology is playing a crucial role in enhancing customer experience and operational efficiency, with innovations such as virtual try-on features, AI-powered hair analysis, and automated color blending machines gaining traction 4. Virtual try-on apps and AR tools are allowing customers to virtually test hair colors and styles before making a purchase 6. These advancements are transforming the way salons operate and interact with their clients.
• Consumer Behavior: Consumers are open to exploring new products and alternatives, with 18% of UK adults having changed hair product brands within the last three months 7. Most adults purchase hair care products every 1-3 months, primarily from supermarkets and drugstores 7. This indicates a dynamic market with opportunities for both established and emerging brands.

4. Challenges

The UK hairdressing industry faces several challenges:

• Competition: The industry is highly competitive, with a large number of salons vying for market share, particularly in densely populated areas 8. This necessitates effective differentiation strategies and strong customer relationships to succeed.
• Rising Costs: Salons are facing rising operational costs, including rent, utilities, and supplies, which can impact profitability 9. Managing these costs effectively is crucial for maintaining financial stability.
• Staffing: Recruiting and retaining skilled staff is a major challenge, exacerbated by Brexit and the pandemic’s impact on training pathways 10. This requires investment in training and development programs and competitive compensation packages to attract and retain talent.
• Economic Conditions: Economic uncertainty and fluctuations in consumer spending can affect demand for hairdressing services 9. Adapting to changing economic conditions and diversifying service offerings can help mitigate this risk.
• Taxation: Recent tax increases, such as those on employer national insurance contributions, have added to the financial burden on salon businesses 11. This emphasises the need for efficient financial management and strategic planning to navigate tax implications.
• Pandemic Recovery: The industry is also facing challenges in its recovery from the COVID-19 pandemic, with rising business costs such as National Insurance contributions, National Minimum Wage and National Living Wage, as well as the huge increase in energy costs 12. The increased financial pressure on salon businesses has put the entire future of PAYE employing and VAT paying salons and apprenticeships at risk 13. This highlights the ongoing impact of the pandemic and the need for continued support and adaptation within the industry.
• Brexit: Brexit has also impacted the industry, with increased costs and complexities related to exports and regulations 14. This requires businesses to navigate new trade rules and adapt their operations accordingly.

5. Financial Data

While specific financial data on individual salon businesses is limited, industry reports provide some insights:

• Average Profit Margins: Salons can earn an average profit margin of 8.2%, higher than the general business average of 7.7% 15. The average profit margin for base salons is 8.2% 16. Well-managed salons can achieve profit margins above 10% 15. Profit margins are a key indicator of a salon’s financial health and its ability to generate profits relative to its revenue. Higher profit margins generally indicate better financial performance and efficiency.
• Operating Costs: Key operating costs include rent, utilities, staff salaries, supplies, marketing, and insurance 17. Managing these costs effectively is essential for maximising profitability. Strategies for cost optimisation include negotiating favorable lease agreements, implementing energy-efficient practices, and streamlining supply chain management.
• Turnover: The hair and beauty industry generated £4.56 billion in turnover in 2022-2023 18. Turnover represents the total revenue generated by a salon from its services and product sales. It is a crucial metric for assessing the overall size and performance of a salon business.

To further understand the financial performance of salons, it’s important to analyse their profitability in relation to their operating costs. Factors such as pricing strategies, service efficiency, and client retention play a significant role in determining a salon’s profitability.

6. Financial Performance of Salons

A breakdown of salon businesses by turnover size band provides further insights into the financial landscape of the UK hairdressing industry 19:

This data reveals that a significant proportion of salon businesses fall within the lower turnover brackets, highlighting the prevalence of small and medium-sized enterprises in the industry.

7. Number of Salons and Employees

The UK has a large number of hairdressing businesses:

 

Metric	Value
Total Number of Salons	Over 48,000 20
Average Number of Employees	Most salons are small businesses, with three-quarters employing fewer than five people and 95% employing fewer than ten 20

This data underscores the fragmented nature of the UK hairdressing industry, with a large number of small businesses operating across the country.

8. Competitive Landscape

The UK hairdressing industry is characterised by a mix of independent salons, large chains, and franchise operations. Some of the major players include:

• Hershenson Products Ltd: A prominent player in the hair and beauty sector 1.
• Rush Hair: A popular franchise brand with a growing presence in the UK 22.
• Toni&Guy: An international hairdressing brand with a strong franchise network 22.

These major players employ various business models to compete in the market. For example, Mascolo Ltd operates a full-service salon model, while Rush Hair utilises a franchise model to expand its reach. These companies differentiate themselves through factors such as brand reputation, service quality, pricing strategies, and location.

9. Regulatory Environment

While there are no general licensing requirements for hairdressers in the UK, some local authorities may require salons to register with them to ensure compliance with health and safety rules 23. However, salons must comply with general business regulations, including health and safety standards, employment laws, and consumer protection legislation 24.

Key employment laws relevant to the hairdressing industry include:

• Written Statement of Employment Particulars: Since April 2020, employers are required to provide new employees with a written statement outlining the terms and conditions of their employment on their first day of work 25.
• Zero-Hours Contracts Phase-Out: The Employment Rights Bill, introduced in October 2024, aims to phase out zero-hours contracts, providing greater employment security for workers in the beauty industry 26.

10. Licensing and Registration

In addition to general business regulations, salons in the UK may require specific licenses and registrations depending on their services and business structure 27:

• Professional Licenses: While not always mandatory, professional licenses for hairdressers can demonstrate competency and adherence to industry standards.
• Salon Business License: Registering with HM Revenue & Customs (HMRC) is essential for tax purposes, and Companies House registration is required for limited companies.
• Premises License: This license allows salons to legally operate on their premises and provide specific services.
• Additional Licenses: These may include licenses for playing music, serving alcohol, or offering specialised treatments.

11. Investment Opportunities

The UK hairdressing industry presents various investment opportunities:

• Mergers and Acquisitions: Acquiring existing salons or chains can provide a quick entry into the market and established customer base 28. This strategy can be particularly attractive for investors seeking immediate market presence and operational infrastructure. However, it’s crucial to conduct thorough due diligence to assess the financial health and growth potential of the target salon.
• Franchising: Investing in a hairdressing franchise offers a proven business model and brand recognition 22. Franchises provide a structured framework and support system, reducing some of the risks associated with starting a new business. However, franchisees need to carefully evaluate the franchise agreement and the franchisor’s track record before making an investment.
• New Salon Concepts: Innovative salon concepts, such as co-working salons and wellness-integrated salons, are attracting investor interest 29. These concepts cater to evolving consumer preferences and offer unique selling propositions. For example, co-working salons provide a collaborative and flexible working environment for independent stylists, while wellness-integrated salons incorporate holistic beauty practices to enhance the client experience.

The potential for high returns and the industry’s growth trajectory make the UK hairdressing industry an attractive investment prospect.

12. Conclusion

The UK hairdressing industry is a dynamic and evolving sector with significant potential for growth and investment. Despite facing challenges such as rising costs, increased competition, and staffing issues, the industry is adapting to changing consumer behavior, technological advancements, and economic conditions.

Key Takeaways:

• The market size is projected to reach £5.8 billion in 2025, with a projected CAGR of 6.6% for the professional beauty services market from 2025 to 2030.
• Key trends include digital evolution, male grooming, sustainability, personalisation, and technological advancements.
• Challenges include rising costs, staffing difficulties, economic uncertainty, and Brexit-related complexities.
• Salons can achieve an average profit margin of 8.2%, with well-managed salons exceeding 10%.
• The industry is fragmented, with a large number of small businesses.
• Investment opportunities include mergers and acquisitions, franchising, and new salon concepts.

Recommendations:

• For Salon Businesses:

• Focus on digital marketing and online booking systems to enhance customer reach and convenience.
• Offer personalised services and bespoke hairdressing techniques to cater to individual client needs.
• Embrace sustainable practices and eco-friendly products to align with consumer values.
• Invest in staff training and development to enhance skills and service quality.
• Implement efficient cost management strategies to maintain profitability.

• For Investors:

• Consider acquiring established salons with strong financial performance and growth potential.
• Evaluate franchise opportunities with proven business models and brand recognition.
• Explore investment in innovative salon concepts that cater to evolving consumer trends.
• Conduct thorough due diligence and market research before making investment decisions.

By understanding the key market dynamics, trends, and opportunities, salon businesses and investors can position themselves for success in this competitive market.

Works cited

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