By Virginia Muzik
Salons and spas in Australia and New Zealand still plan to make major changes to their businesses in spite of the gloomy economic climate, according to a recent online survey conducted by Professional Beauty magazine.
The majority of salons and spas surveyed (61.7 per cent) indicated they are planning major changes to their business in 2009. Increased advertising/marketing spend topped the list (55.2 per cent), while 44.8 per cent intend to increase staff, 31 per cent plan to change current stock and 27.6 per cent wish to renovate.
Other changes mentioned included relocating, introducing new products, equipment and treatments to their menus, more training of current staff, introducing client incentive programs and increased internet presence.
While at least one business owner plans to “start praying”, no respondents said they planned to downsize or close their business.
Retail sales during the 2008 Christmas trading period were up by 1 to 10 per cent compared to the same period in 2007 for 24.5 per cent of respondents, while 22.4 per cent said their figures were up by 10 to 25 per cent. Figures were "about the same” for 16.3 per cent of respondents, and the same percentage also experienced a sales decrease of 10 to 25 per cent.
Nearly 30 per cent of respondents said their retail sales figures in the 2008 calendar year were about the same as those in the 2007 calendar year. Sales were up by 10 to 25 per cent in this period for 24.5 per cent of respondents, and up by 1 to 10 per cent for 20.4 per cent of salons and spas.
The most popular treatment over the Christmas period was waxing (61.2 per cent), followed by facials (51 per cent), sunless tanning (34.7 per cent) and nail services (30.6 per cent).
Not surprisingly, the factor having the biggest negative impact on sales figures in the Christmas trading period was the economy, according to 57.1 per cent of respondents. Next was consumer confidence (28.6 per cent) followed by 22.4 per cent citing “other” factors, including lack of qualified staff and “government advertising against tanning”. Half the respondents stating other factors said there was no negative impact or that sales were up.
The biggest positive impact on sales figures during the Christmas trading period included highly skilled staff, loyal clients, in-house advertising and promotions, gift voucher sales, pre-booking of regular clients, the government bonus, people still wanting to look good and the good weather.
An average of nearly 75 per cent of 2008 turnover was treatments and 25 per cent retail sales. Most respondents said they planned to improve retail sales in 2009.
Factors having the biggest negative impact on sales figures in the 2008 calendar year were the economy (51 per cent), consumer confidence (36.7 per cent), advertising/marketing costs (18.4 per cent) and “other” factors (22.4 per cent), which included a lack of staff predominantly, as well as suppliers’ increased prices, and clients in regional areas choosing supermarket beauty brands over salon brands.
Factors cited as having the biggest positive impact on sales figures in the 2008 calendar year included the Christmas period itself, advertising and marketing, clients, word of mouth, pricing, client rewards, customer service, staff training and the quality of products used.
Sales figures in the first six months of 2009 are expected to be up by 1 to 10 per cent, according to 31.9 per cent of respondents, followed by 19.1 per cent expecting an increase of 10 to 25 per cent. Around 15 per cent anticipate a decrease of 10 to 25 per cent, while nearly 13 per cent expect figures to remain about the same as the first six months in 2008.
For the second half of 2009, 38.3 per cent expect an increase in sales figures of 1 to 10 per cent, while 23.4 per cent anticipate it to increase by 10 to 25 per cent, and 21.3 per cent expect “about the same”.
The majority of respondents (34 per cent) are confident of their business’s prospects in 2009, with nearly 30 per cent saying they are “very confident” and 27.7 per cent “slightly concerned”.
The online survey included spas and salons from each state of Australia, as well as from New Zealand – 79.6 per cent of respondents have an annual turnover of less than $500,000, 14.3 per cent have an annual turnover of $500,000 to $1 million and 6.1 per cent have an annual turnover of $1 million to $2 million.
This survey is the first in what will be an annual industry survey by Professional Beauty magazine.