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Salon Management

State of the Salon Industry: New Study Details Factors Leading to Low-Growth

by MODERN Staff | March 27, 2019
 Professional Consultants & Resources
Professional Consultants & Resources

Topline revenues for all salon industry services (hair, skin, nails) plus salon retail grew only 1.8% to $64.3 billion, according to the new 2018 Professional Salon Industry Haircare Study from Professional Consultants & Resources, the leading salon industry consultants and comprehensive data source. Around 257,000 salons and barbershops in the United States used or sold professional hair-care products. Salon count declined minimally, as the closure of traditional, commission-based salons slowed and large salon suites opened. The study features detailed illustrative graphs and charts, making all data user-friendly.

 “The state of our salon industry is still weak and in a very low-growth mode, due to a complex multiplicity of factors,” says Cyrus Bulsara, president, Professional Consultants & Resources.The “SalonSuitesTsunami” has driven salon retail to Amazon and other e-commerce platforms, ULTA and mass-retail diversion. Growth of hair color—still the anchor service—has slowed to 3%, due to lower salon visit frequencies and women who are concerned about chemical services or prefer the natural gray-, silver- or white-hair look. Women opted for inexpensive cuts at family-economy chains andstyled their hair at home. Price-conscious male clients had their hair cut at Sport Clips, Great Clips, Supercuts and barbershops. Family-economy salons continued to grow robustly.Sales of shampoos, conditioners, hair sprays, hair-styling products and specialty products all increased, but at much lower rates and in salons, occurred primarily after hair-color services. Major M&A activity and line integration at Coty and Henkel still created down-stocking and distribution realignments. The U.S. economy trended up strongly at 3% gross domestic product, with future growth projected to continue. In the salon industry, innovative hair color, high-performance hair care, new specialty products, men’s lines and large salon suites will all drive future growth.”

 Hair coloring remains a vital anchor service at U.S. salons, attracting clients for all other services like cuts, styles, perms and straighteners. Hair-coloring services grew 3%, primarily due to an aging population, demanding gray-coverage and young adults’ needs for fashion color like blonding, highlights, baby-lights, balayage, sombrés and shadow roots. The growth of vibrants, vivids and pastels slowed, as did the growth of keratin straightening and smoothing services. Cutting and styling grew only 1.8%, as client visit frequencies continued decreasing, and more cuts were performed at lower-priced family-economy chains and rentals. Blow-Dry Bars grew robustly at 25% in both revenues and locations. New Color Touch-Up Bars emerged.

 Major salon industry dynamics and highlights emerging from this study include:

  • Men’s hair color grew robustly. The study features detailed analysis of men’s salon services and product sales in tables and graphs.
  • Traditional and mall salons closed at a rapid rate, losing share to family-economy chains, new salon suites and premium barbershops.
  • Beauty Systems Group/CosmoProf sales were flat. L’Oréal’s SalonCentric’s sales grew 3%, due to the popularity of Redken/partner brands.
  • Sally Beauty store sales were also flat, due to industry M&A and resultant down-stocking, plus adverse weather in Texas, Florida etc.
  • Top salon suites—Sola, Salon Plaza, Salon Lofts, Salon Republic, Solera, Phenix, Salons by TJ and Salon Concepts—continued to grow rapidly.
  • Regis continued to stabilize, as it divested and franchised its mall-based salons and reconfigured SmartStyle value brands.
  • Great Clips and Sport Clips grew, as both family-economy chains continued to take market share from traditional salons.
  • Salon retail hair care grew minimally, with growth attributed to after-color products, new oils, hair/scalp masks, and deep conditioning treatments.
  • Styling product sales grew low single digits, as clients styled their hair at home with newer, more efficient, styling tools.
  • Specialty products, including oils and those for hair thinning, hair loss, shine and thermal protection, grew at mid-single digits.
  • Sales of shampoos/conditioners grew at very low single digits. Women shampooed less frequently and many used cheaper mass brands.
  • At ULTA, salon product sales grew robustly at 15%, as a result of aggressive advertising and promotions.
  • Redken and John Paul Mitchell Systems were again the only two major companies with mid-single-digit growth.
  • Henkel overtook Coty as the No. 2 company in the U.S. salon market. Direct sales at Wella, Aveda and Bumble+bumble grew at lower rates.
  • The study quantifies and analyzes major dynamic salon shifts and trends in detail and includes detailed salon counts for U.S. salon chains.
  • Market shares are detailed for every company, with L’Oréal Professional, Henkel Professional, Coty Professional and John Paul Mitchell Systems, respectively, ranked as the top four manufacturers. Henkel vaulted into second place with Schwarzkopf, Sexy Hair, Kenra, Guy Tang Mydentity, Alterna, Zotos, Joico and Pravana. Estée Lauder with Aveda and Bumble+bumble ranked fifth. Unilever (TIGI and Alberto-Culver), Revlon Professional (American Crew/Roux/Crème of Nature) and KAO (Goldwell/KMS/Oribe) followed. Kevin Murphy, Luxury Brand Partners and Keune Haircosmetics North America all achieved a healthy double-digit growth.

NEW study sections detail cut, color and style trends; data analysis of barbershops and men’s services/products; ingredient issues; leading manufacturers’ reps; plus sales data for AG Hair, Aloxxi, Alterna, Bio Ionic, Brazilian Blowout, Cadiveau, Peter Coppolla, Phyto, Davines, IT&LY, Framesi, GK Hair, Kenra Professional, Keratin Complex, Keune, Marcia Teixeira, Scruples and other brands. For purchasing info/questions, contact Cyrus Bulsara at cyrus.bulsara@ProConsultants.us or visit ProConsultants.us

Originally posted on Modern Salon

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