Professional Beauty Association Report Reveals Spa Sales Growth

After seeing an increase in the third quarter of 2014, the Professional Beauty Association's (PBA) Salon/Spa Performance Index (SSPI) has continued to increase slightly by 0.5 percent in the fourth quarter 2014; its highest level since fourth quarter 2013. "The professional salon/spa industry continues to build off the success of the third quarter in 2014,” says Steve Sleeper, executive director of PBA. “Overall indicators and feedback from beauty professionals across the country continue to be positive and we remain optimistic that the beauty industry will continue this growth into 2015.” Stronger retail sales and customer traffic levels significantly contributed to this increase. Sixty percent of salon/spa owners reported an increase in retail sales, which is up 48 percent from the third quarter in 2014. Similarly, 43 percent of salon/spa owners reported an increase in customer traffic. For the first time in seven quarters, salon/spa owners reported a net decline in staffing levels, with 25 percent having fewer employees. Employee hours, however, have remained relatively steady.

The SSPI is a quarterly composite index that tracks the health and outlook of the U.S. 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 Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours and capital expenditures), increased to 101.3 percent; up 0.7 percent from the third quarter. The Current Situation Index has remained above 100 for the ninth consecutive quarter, which marks expansion in the industry 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) increased to 105.2, up 0.2 percent, in its highest level in four years. Like the Current Situation Index, the Expectations Index continues to solidly remain above 100 as well, which indicates that salon/spa owners are optimistic about business growth in the coming months.   

Breaking down some of the results, Salon/spa owners were most positive on growth relating to service sales, retail sales and staffing levels; sixty-nine percent of which are expecting to see higher service sales within the next six months. Similarly, 60 percent of spa and salon owners expect to have higher retail sales in the next six months, while 58 percent are planning to increase staffing levels. Regarding the overall economy however, only 52 percent of salon/spa owners expect to see improvement, unchanged from last quarter. The proportion of salon/spa owners who are planning for capital spending rose to 57 percent; up 6 percent from last quarter and the strongest level in nearly five years. 

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

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