NCA’s online survey gives us some insight into the perceptions of industry professionals on a variety of topical issues.  We’ve asked about everything from diversion, tip rates, taxes and more general topics such as presidential politics, consumer trends - and most recently the economy. 

With gas and food prices creeping up fast, we thought we’d check in with salon owners and professionals to get their take on the latest economic headlines.  Here’s the most recent tally of survey results:

Based on the latest headlines, the country is either in a mild recession or perhaps more.  From the point of view of your business, what’s your take on the economy?

• We are in what feels like a mild recession - 58%
• We are in what feels like a full blown recession - 29%
• We are not feeling the impact of what may or may not be a recession - 13%.

What is your take on spending on services?

• We are experiencing lower spending on services - 74%
• We are NOT experiencing lower spending on services - 26%

What is your take on tips?

• We are experiencing a reduction in tips - 69%
• We are NOT experiencing a reduction in tips - 31%

What is your take on retail sales?

• We are experiencing lower retail sales - 81%
• We are NOT experiencing lower retail sales - 19%

Only 13% saying they believe we are NOT in either a mild or full blown recession - and the majority by far are experiencing a reduction in service sales, tips, and retail sales (81% saying that salon retail is DOWN!).

What are your thoughts on the current economy and its impact on salons?  As importantly, how are you coping with the situation and what advice do you have for others working hard to make the most of a challenging situation? 

To take NCA’s online poll about the economy, visit www.ncacares.org and look in the bottom right hand part of the screen.  To comment on this posting, click on the “comments” link below.  If there is no comments link below, click here and then click on the comments link that will be below this paragraph.

The more things change, the more things stay the same — especially when it comes to diversion and the ongoing struggle to overcome the problem and eradicate it for good. Despite the best intentions of many, sales of professional products in unauthorized outlets, which first began to impact the professional beauty industry in the 1980s, have snowballed to epic proportions in the last couple of years. So much so that a December 2004 BusinessWeek article stated that nearly $800 million of the beauty industry’s $29 billion yearly in product sales may be diverted or counterfeit.

The news from the Beauty Industry Fund (BIF), an association of comprised of manufacturers, distributors and salon owners who have formed a united front in the war against diversion is just slightly better. The BIF’s AC Neilson/Market Decision data, which can be accessed online at the organization’s BIF Web site, http://beautyindustryfund.com/, confirms that between Quarter 3/2006 to Quarter 4/2007, the Total Professional Salon hare Care Products Diverted Dollar volume decreased by .2 percent. While the decrease from Quarter 3 to Quarter 4 was minimal, it was the first time over the last eight quarters that Diverted Dollar Volume did not increase.

With that in mind, American Salon Magazine will be dedicating a special supplement to diversion in July 2008 and we’d like to hear your thoughts on this vital issue that impacts the livelihood of professional salons. Specifically, we’d like to know if you’ve seen a positive change in the diversion problem in your local area and whether you’ve taken any steps in your salon to play a more active role in the diversion fight.

And finally, we’d also like your feedback on what more you think manufacturers could be doing more of to combat diversion and what you’d like them to know about the problem, in general Please be sure to include your name, salon name, and the city and state you’re located in. Thanks, and I look forward to hearing from all of you!

Kelley Donahue
Executive Editor
American Salon Magazine

Ghandi famously once said “be the change you want to see” - an inspired call to action for us all (and one that can apply to the salon!).

The video below is from Youtube and is well worth the four minutes it takes to watch.  Featuring regular folks sharing their personal calls for change, we hope it will inspire you to slow down for a moment, think about your own life, your place in the world, and the difference each of us can make when we try.  

If you cannot see the above video, click here.

Want to share your thoughts on the kind of change you’d like to see in the world - and perhaps in our industry?  Click on the “comments” link below.  If there is no comments link below, click here and then on the comments link that will appear below this paragraph.

According a recent article in the Chicago Tribune, (click here to read the article) tipped workers across all walks of life are beginning to feel the impact of what is more and more being called a “recession.”  With tips accounting for as much as 25% of many salon professionals take home earnings, this news could translate into a big hit to your pocketbook - even if bookings remain even with last year.

To give a sense of just how a shift can impact you, consider the following example:

Assumptions: 

1. Mary averages $30,000 before taxes and not including tips.  This translates into an average of $600 per week (assuming ten days during the year of unpaid time off). 
2. Her service bookings averaged $1,000 per week - or a total of $50,000 for the year.
3. Mary average $180 per week in tips - or 18% of service dollars. This adds up to 
   $9000 in tips for the year bringing her total pay to $39,000 (before taxes).  In this example, tips represent 23% of Mary’s total pay before taxes.

Now let’s change just one assumption - and bring overall tips down to 12% - or a reduction of $60 per week - or $3000 for the year.  This is a change in total compensation from $39,000 to $36,000. 

Translation - overall take home pay went down by 8% - at a time when the price of milk has gone up 12% since Christmas and gas prices are topping $4 a gallon in many markets.

We’d like to hear from you.  Are you noticing a shift in tips?  What’s your take on the overall economy and its impact on business?  Do you find yourself reducing tips to other service workers in recent months?  And most importantly, how are you working to offset any declines in your revenue?

To comment on this posting, click on the “comments” link below.  If there is no comments link below, click here and then click on the comments link that will be below this paragraph.