PBA’s Salon & Spa Performance Index Hits Two-Year Low

Nancy Griffin

Don’t shoot the messenger, but spas and salons are continuing to struggle in the current economy. According to the latest research by The Professional Beauty Association (PBA), the current outlook and future expectations for the salon and spa industry have declined throughout 2011. “The trend results from our Salon & Spa Performance Index (SSPI) are discouraging,” according to Steve Sleeper, executive director for the PBA.

The SSPI is a quarterly composite index that tracks the health and outlook of the U.S. salon/spa industry. The SSPI declined 1% from the second quarter of 2011 to stand at 101.9 in the third quarter. This is the second consecutive quarterly decline and a 1.3% drop compared to the third quarter of 2010.

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. PBA has three main tracking indices for the salon/spa industry: The Salon & Spa Performance Index (SSPI), Current Situation Index and Expectations Index. All three continued to decline in the third quarter of 2011 and hit their lowest levels in two years. The good news is that all three Index values are above 100, which indicates a period of expansion. An index values below 100 represent a period of contraction.

The Current Situation Index measures current trends in five industry indicators—service sales, retail sales, customer traffic, employees/hours, and capital expenditures. The index fell to 100.3 in the third quarter – down 1.1% from the second quarter 2011. Sales and customer traffic took the biggest hit. Consecutive quarterly declines show erosion in consumer spending levels with regard to beauty purchases and the broader economy, according to the PBA.

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) fell to 103.5% – down .9% from second quarter 2011 and 1.7% from the third quarter 2010.

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