For the first time in four years, the number of empty shops is reducing. Many of these are the beauty industry returning to the retail sector. With the current price rises in basic business costs, though, will this be a short-lived revival?
If you are in the retail beauty industry, you could be forgiven for feeling hard done by. Let’s face it, the retail industry overall has had a pretty hard time over the last few years, and the beauty retailers were hit particularly hard. Then, once the restrictions of Covid began to lift, not only did beauty retail bounce back, but it also bloomed. Consumers wanted to get back into the shops. Online has its charms, but let’s face it, nothing beats a good shopping trip. As well as the direct channel sales in retail, the hair and beauty professionals found themselves back in demand. All of this resulted in a period of growth for retail overall, with beauty leading the way. However, here at Lavandi Talent, we're seeing that things are once again changing and sadly not in favour of the already hard-hit sector.
Every retail business, from the sole trader beautician through to the large retailers, is feeling the financial pressure from increasing prices. Utilities are now a worrying overhead for businesses, with electricity often costing 50% more than it did last year. The cost of goods is rising, and while rents may not be significantly higher, there are often still debts to be paid from bounce-back loans and deferred rent from the lockdown periods. Add to this the increased cost of fuel, which impacts cost of goods, and an increase in national insurance, which comes on top of a generally more expensive employment market, and it seems like the odds are against the retail beauty sector.
We tend to perhaps be a little too blasé about the High Street. There is a lot of concentration on the fast development of the online beauty sector, and a lot of focus goes on what is happening in the digital space. What we must not forget, though, is that the retail environment is vital to the beauty industry. For many consumers, the experience of shopping and the expert advice from an advisor cannot be replaced. The chat over coffee while a new look is created, the experimentation and exploration of a makeover, the first shopping trip of a young person to buy their own beauty products, and a thousand other retail experiences are all part of the fabric of our identity as consumers. Beauty-related retail is worth billions to the economy and is a major employer. It also pumps millions into the advertising and marketing industries, gives early career breaks to apprentices and new workers of all kinds and supports innovation in everything from design to ethical trading. Retail beauty matters, not just financially but also because it has a role in our existing and developing culture.
The harsh reality is that the cost of business is pushing retailers (and indeed many other businesses) to the brink. The increase in the cost of business will inevitably translate to higher prices. With rising costs already pushing inflation, higher interest rates increasing the burden of mortgages and the threat of even more utility price increases looming, consumers will start to cut back on spending. The beauty industry will feel this as much as any industry sector and more than many. If this is allowed to happen, then the industry will suffer, and many businesses will be unable to ride the rapids and find themselves in very deep water financially. The metaphor of a river is very appropriate here. The easiest way to avoid the danger of the white water is to cross the river at its source. In short, if you want to avoid the rapids, do so before the fast water develops. If there is appropriate help now, then perhaps we can avoid the financial white water later. Capping energy costs or extending schemes to cover retail premises, for example, would certainly be a start.
For all the reasons we mentioned and for the sake of the human cost, isn’t it time for the government to recognise the valuable part played by the retail beauty industry and do something to help?