According to a survey conducted over the first 11 months of 2018 by Tokyo Shoko Research, 86 beauty parlors filed for bankruptcy last year, the highest figure over the previous decade.
In 90% of the above cases, which involved shops employing five people or fewer, the failure was blamed on business shortfalls, and it appears that smaller enterprises are suffering disproportionally. This goes against the once-common view that jobs involving working with one's hands are among the most resistant to hard times.
A person with knowledge of the industry told Shukan Jitsuwa (Feb 7), "The main cause of failure by beauty parlors is intensification of competition. And while the number of trained beauticians has been increasing, the decline in population means there are fewer customers to serve."
According to the Ministry of Health, Labour and Welfare, in 2017 some 245,578 such businesses were operating in Japan, an increase of 12% from 10 years previously. That figure, by the way, is more than fourfold the 55,664 convenience stores nationwide.
"Since the costs associated with starting up a beauty salon are comparatively low, it's an easy business to get into," the aforementioned expert is quoted as saying. "A person who works hard and puts away a reasonable amount of savings can probably open one."
Despite the larger number of shops, estimated annual revenues for the industry declined slightly, from 1.51 trillion yen in 2017 to 1.505 trillion yen last year, and are projected to drop below the 1.5 trillion yen baseline in 2019.
"While the number of shops has been increasing, customers are declining," the operator of a beauty parlor told the magazine. "The dankai no sedai (post-World War II baby boomers) and those above them are aging, and even if they come for a treatment, say, once a month, the numbers are going down."
Particularly in rural areas where the elderly make up a higher percentage of the population, growing numbers of customers are said to only visit a shop a few times a year.
"When we first opened around 20 years ago, we could rely on taking care of a fixed number of customers without much effort," said another beauty parlor operator. "But then from around 10 years ago, rival shops began opening one after the next, and customers declined. So we began handing out tickets entitling customers to 10% off on their next visit, but that failed to promote new business."
"Recently we noticed shops posting discount coupons on a house in the neighborhood," she grimaced. "Other shops began doing the same, so we ran ads in a local free newspaper offering a discount. Not that it helped any."
Those in the know foresee a polarization of the business model.
"To survive will require using technologies to raise customer satisfaction," says an authority on the beauty industry. "The customers to aim for are affluent people who aren't affected by fluctuations in prices, and pampering them. But only a small percentage of shops are really capable of doing that. For the rest, we're going to see more chain franchises where a simple cut can be had for just 1,000 yen or so. Things are moving toward competition where it's just a matter of who can offer the cheapest prices."© Japan Today