The sector’s revenue is estimated at $7.9bn. And while there is a 1.6 per cent growth predicted, over the past five years industry revenue has slipped by 2.5 per cent.

Profits across the industry sit at $928.3 million, a drop of 3.9 per cent across the five years to 2023. Between now and 2028 the profit margin is expected to rise from 11.7 per cent to 13 per cent.

This is a sector that maintains steady consumer demand, although it is highly competitive with both physical and online stores attracting consumer spend. Both men and women consider a haircut an essential part of maintaining their image and this still requires a visit to a salon.

Hair and beauty services vulnerable to consumer sentiment

However, day spas, hotels and airports are vying for a share of the market. Premium services are susceptible to weak consumer sentiment. When customers have more money in their pockets, they are likely to boost their spend on beauty, hair and nail care treatments.

Salon owners who have boosted their customer experience have helped drive these higher value services – such as laser hair removal, injectables, chemical peels and premium hair salon treatments.

The author of the IBISWorld report, Hairdressing and Beauty Services in Australia, January 2023, Ekatarina Ezhova, also suggests the male consumer will become a more prominent focus for salons as they differentiate themselves from DIY treatments.

Creating niche markets is likely to be more popular, whether that is male grooming, hair removal, blonde hair treatments, anti-ageing beauty, hair colouring or speedy services.