The latest State of the Sector survey results from the National Hair & Beauty Federation (NHBF) reveals that many businesses are working hard but struggling to remain profitable as rising employment and operating costs continue to squeeze the sector.
Key findings from the NHBF State of the Sector Survey 2026:
- Nearly three quarters of businesses are operating on razor-thin margins, with most making only a small profit or breaking even.
- One in five businesses are already operating at a loss, highlighting the fragility of the sector.
- Price rises are continuing, with 307 businesses expecting to increase prices in the next three months as costs continue to climb.
- Apprenticeships are under severe pressure, with 388 businesses saying they are unlikely or definitely not planning to take on apprentices in the next three months.
- More than 300 businesses say labour costs are their biggest pressure, particularly minimum wage increases and employer National Insurance changes.
The survey of 423 hair and beauty professionals across the UK reveals a sector that remains active but increasingly constrained by rising statutory costs, energy prices and property expenses.
Many businesses report being busy with clients while still struggling to generate profit – a reality described by respondents as “busy but not profitable.”
While most respondents believe their business will survive the next six months, confidence is fragile, with 131 businesses unsure about their short-term outlook.
The research also highlights the structural nature of the pressures facing the sector. Rising labour costs, energy bills and commercial rents are combining to create a “cost stack” that many businesses say is pushing them towards survival decisions rather than growth.
Apprenticeships and employment under threat
The results raise serious concerns about the future workforce pipeline. The hair and beauty sector is largely made up of micro-businesses employing fewer than five staff, meaning apprenticeship training relies heavily on small employers having the financial capacity to recruit and train.
However, the survey shows that many employers have already cut back on apprenticeships, and the vast majority do not expect to recruit new trainees in the immediate future.
Autumn Budget pressures
The sector is also bracing for the cumulative impact of the 2025 Autumn Budget, which will take effect from 1st April, the start of the new financial year. Most businesses are expecting the combined measures to have a negative impact on their viability.
Many say they are likely to respond by increasing prices, freezing recruitment, reducing apprenticeships or delaying investment.
NHBF support for businesses
While the NHBF continues to lobby government for fairer policies on employment costs, business rates and VAT fairness, the organisation is also urging businesses to access the support already available.
NHBF provides practical resources including legal guidance, HR support, business advice, employment templates and helplines designed specifically for hair and beauty employers.
The Federation says that while policy change is essential, salons and barbers cannot afford to wait for government decisions that can take years to materialise.
Businesses need practical help now to navigate employment law, staffing decisions, apprenticeships, and cost pressures.
Sam Silver, Head of Policy and Public Affairs at the NHBF, said:
“These results show a sector that is working incredibly hard but operating with very little headroom. Many businesses are busy with clients yet still struggling to generate profit once rising employment costs, energy prices and other overheads are taken into account.
The evidence also shows how these pressures are directly affecting decisions on recruitment, apprenticeships and investment. When micro-businesses are forced into survival mode, training and employment are often the first things to pause.
That’s why NHBF is using this evidence to continue pushing government for a fairer operating environment for our sector while also making sure businesses know that practical support and guidance is available to them now.”
The findings were unveiled at the NHBF’s Respect Live event this week, forming part of the wider Respect Our Sector campaign, which calls for policies that support compliant high-street businesses to employ staff, train apprentices and invest in their communities.