Salon and Spa Industry Has Slight Increase in Second Quarter 2013

spaincrease_m

After holding steady in this year's first quarter, the Professional Beauty Association's (PBA) Salon/Spa Performance Index (SSPI) rose 0.2% in the second quarter of 2013, climbing to its highest level since the second quarter of 2012. Positive sales and traffic, higher staffing levels and an increase in capital spending all contributed to this increase. Furthermore, the Current Situation Index increased by 0.7% to 101.1%, while the Expectations Index decreased slightly by 0.2% to 104.2%.

The SSPI is a quarterly composite index that tracks the health and outlook of the United States salon/spa industry. The SSPI is based on responses to PBA's "Salon/Spa Industry Tracking Survey," which is fielded quarterly among salon/spa owners nationwide on a variety of indicators. It is constructed to measure the health of the salon/spa industry in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction. The Index consists of two components: the Current Situation Index and the Expectations Index.

"The professional salon/spa industry remains resilient with this growth in the second quarter. Overall indicators and feedback from beauty professionals across the country continue to be positive, which leads us to expect steady growth in the rest of the year," said executive director of PBA Steve Sleeper.

The Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours and capital expenditures), stood at 101.1%, rising 0.7% from the first quarter. The Current Situation Index has remained above 100 for the third consecutive quarter, which marks expansion in the industry indicators.

Service sales, staffing levels, customer traffic levels and capital spending in the second quarter of 2013 were stronger. Fifty-three percent of salon/spa owners reported an increase in same-store service sales between the second quarters of 2012 and 2013. Similarly, spa and salon owners reported a 36% increase in capital spending, up from 28% in the first quarter. In contrast, hours of employment were slightly down. While this area did not post concerning results, it countered the positive indicators.

The Expectations Index, which measures salon/spa owners' six-month outlook on five industry indicators (service sales, retail sales, employees and hours, capital expenditures and business conditions) declined slightly by 0.2% to 104.2%. The Expectations Index continues to remain above 100%, which indicates that salon/spa owners are optimistic about growth in the coming months.

Salon/spa owners were most positive on growth relating to service sales and retail sales. However, fewer salon/spa owners are optimistic about the overall direction of the economy and not planning to expand staffing levels in coming months or make capital expenditures for equipment, expansion or remodeling.

The full SSPI report and the "Salon & Spa Tracking Survey," along with other helpful research on the professional beauty industry, can be found at www.probeauty.org/research.

More in Trends