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Surviving the rise of energy costs

With energy prices set to increase by 54% in a week’s time, the leading organisations within personal care have come together ahead of this week’s Spring Statement to call for an energy bill rebate. They ask for the same help that was offered to domestic properties in February to be made available to commercial properties too. Why? Because the industry is fearful that rising energy costs could be the straw that breaks the camel’s back whilst they are still recovering from the pandemic.

The British Association of Beauty Therapy & Cosmetology (BABTAC, British Beauty Council (BBCo), Federation of Holistic Therapists (FHT), Hair & Barber Council, National Hair & Beauty Federation (NHBF), Sunbed Association and UK Spa Association have all been responding to concerns by worried salon owners around rising energy bills and the already tenuous positions their businesses are in after two years of lockdowns and operational restrictions affecting income.

After highlighting these concerns to Government, the collective issued a cross sector survey to assess the seriousness of the current situation. In just 48 hours they received stark feedback from a massive 1,774 businesses.

The findings

  1. 94% said utility bills have increased compared to this time last year

With a third (32%) stating energy bills are their largest overhead and a further 50% stating it is their second greatest overhead – this is a real concern for businesses struggling to rebuild their businesses post pandemic. 

  1. 44% of businesses within personal care reported bill rises of 0-50%, 41% said they had risen by 51-100% and 10% had risen by a staggering 101-200%.
  2. 57% have attempted to switch supplier but 70% had been unable to renegotiate their current contract with their existing supplier

Of those that had been unsuccessful, almost half said this was because they couldn’t afford the rate offered (46%) Of the 41% that responded ‘other’, the most common reason was being stuck in an existing contract with their energy supplier that they could not get out of.

  1. 82% have taken other steps to reduce their energy costs – including turning down heating, turning off lights more frequently and turning off sockets at the end of each day*. Unfortunately, some businesses also report closing the salon for a day a week to save costs.
  2. Almost half of businesses (47%) have reduced other business costs to be able to afford increasing utility bills. Most by reducing stock purchasing, and more concerningly, by reducing staff and personal wage costs.

The battle

Lesley Blair, CEO of BABTAC commented “When salons have worked so hard to survive and are now beginning to rebuild it really does feel like one thing after another. We’ve been highlighting growing concerns around post COVID recovery as utility costs continue to spiral for some time and were keen to feedback to Government on the impact this is having on the personal care sector.”

Victoria Brownlie, Chief Policy Officer at the British Beauty Council added “We’re really hoping that, with pressure from the many other sectors as well as personal care, the Chancellor will outline some specific business support around the rise in energy costs, just as the Treasury has done in recent months for domestic households. It is short-sighted, especially in this period of recovery, to think that individual households are the only ones suffering.

Richard Lambert, Chief Executive of the NHBF said “‘We’re at a crunch point. The increase in energy prices on top of growing wider business and staff costs is and will be significant for many businesses. An energy price rebate would at least help spread the costs and allow more time for the sector to recover”.

Keith Conniford, Registrar of the Hair and Barber Council said ‘The concerns for our sector are very real! With the huge increase in energy prices together with the upcoming increase in staffing and business costs pose a huge threat to the recovery from the pandemic, the high street and the very existence of many hair salons and barbershops throughout the country. I cannot stress enough that the Personal Care sector needs some business support to help see our sector through these increasingly worrying times.”

The Spring Statement will be announced by the Chancellor on 23 March. 

For more NHBF news click HERE

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