Industry Outlook Improved as the Salon/Spa Performance Index Rose in the Second Quarter 2009
The outlook for the salon/spa industry improved in the second quarter, as the Professional Beauty Association’s (PBA) comprehensive index of salon/spa activity registered a solid gain. The Association’s Salon/Spa Performance Index (SSPI) – a new quarterly composite index that tracks the health of and outlook for the U.S. salon/spa industry – stood at 101.8 in the second quarter, up 0.7 percent from its first quarter level.
“The SSPI rose in the second quarter, and stood above 100, which is a positive sign for the overall health of our industry,” said Steve Sleeper, executive director of PBA. “Salon/spa owners reported a positive six-month economic outlook for both sales and the overall economy, while capital spending plans held relatively steady.”
The Salon/Spa Performance Index is based on the responses to PBA’s Salon/Spa Industry Tracking Survey, which is fielded quarterly among salon/spa owners nationwide on a variety of indicators including service and retail sales, customer traffic, employee/hours and capital expenditures. The Index consists of two components – the Current Situation Index and the Expectations Index.
The Salon/Spa Performance Index is constructed so that the health of the salon/spa industry is measured 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 for key industry indicators.
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 99.7 in the second quarter – up 0.9 percent from its first quarter level of 98.8. However, the Current Situation Index remained below 100 in the second quarter, which signifies contraction in the current situation indicators.
Salon/spa owners reported an improvement in service sales in the second quarter. Thirty-nine percent of salon/spa owners reported an increase in same-store service sales between the second quarters of 2008 and 2009, up from 35 percent who reported a sales gain in the first quarter. Thirty-nine percent of salon/spa owners reported a same-store service sales decline in the second quarter, down from 44 who reported lower sales in the first quarter.
Although the overall retail sales picture improved somewhat in the second quarter, salon/spa owners continued to report lower retail sales volume. Thirty-three percent of salon/spa owners reported higher retail sales between the second quarters of 2008 and 2009, up from 26 percent who reported a retail sales gain in the first quarter. Forty-four percent of salon/spa owners reported lower retail sales in the second quarter, down from 49 percent who reported similarly in the first quarter.
Salon/spa owners are also decidedly upbeat about the direction of the overall economy. Sixty-three percent of salon/spa owners said they expect economic conditions to improve in six months, while only six percent expect to see worse economic conditions in six months. This sentiment was relatively unchanged from first quarter levels.
“The Professional Beauty Association continues to supply the beauty industry with timely and relevant economic data to help our members and the industry at large make successful and strategic business decisions” said Steve Sleeper “doing so is a core mission of the PBA.”
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PBA Salon-Spa Performance Index - 2009 Q2