Protect Your Salon: Navigating Recessions & Tariffs

As tariffs affect import costs and recession concerns influence spending, salon owners across the country are navigating a perfect storm of rising operational expenses and an increasingly cost-conscious clientele. The question isn't whether all this will affect your business, but how quickly you can adapt your services, pricing, and strategy to not just survive, but thrive through these challenges. Below we review the warning signs to look out for, with a practical step-by-step guide on how your beauty business can respond and prepare for what’s to come.

What is A Recession?

Economists with fancy pedigrees actually still argue over the exact definition of what a recession is and when we, as a nation, are experiencing one. To keep it simple, a recession is a period (at least 2 consecutive quarters) of negative economic growth, wherein a country’s gross domestic product (GDP) shrinks.

As a result, more people spend less money. This leads to lower demand for products and services. In the context of a salon or other beauty business, you might notice more and more clients stretching their budgets. They may put more time between appointments and opt for lower-maintenance cuts, styles, coloring, or nails. They may not buy as many hair- and skin-care products as before or opt for cheaper ones.

Profits go down and, in response, businesses are forced to cut costs and potentially let go of employees. Lower wages and uncertainty lead to less spending and... Well, it’s a vicious cycle.

Many things can contribute to a recession, or, at the very least, an economic slowdown of some kind. Let’s talk about one thing that the beauty industry has been buzzing about lately...

#1 software & app for beauty, wellness and fitness

START FREE TRIAL

What Are Tariffs?

We’ve heard the “T-word” a lot in recent memory. Again, let’s keep it simple: Tariffs are taxes that a government imposes on imported goods from other countries. When a business imports these products, they must pay this additional tax to bring those goods into the country.

In the beauty industry, higher tariffs increase wholesale product costs for salons and other businesses, who would likely need to raise service prices to maintain their profit margins. Their clientele may respond by spending less money, less often.

Why is this? Well, a large portion of beauty products used and sold in salons are imported or contain imported ingredients. This includes nail polishes, hair care products, skincare treatments, tanning solutions, and eyelash extensions.

In recent times, hair extensions have gotten particularly pricey [1], as have European hair coloring brands. Styling tools, like scissors, dryers, and chairs, have also seen increases, especially those produced in China.

Evidence that this is all starting to take a toll is probably right in front of you (or on your phone screen).

The Resurgence of Recession Hair

There is a famous economic theory from the 1920’s (or quasi theory, depending on whom you ask) that connected the state of the economy—consumer confidence, disposable income, —with women’s fashion, called the Hemline Index [2].

Basically, this theory says that shorter hemlines indicate a strong economy (think miniskirts in the 50’s, Flapper dresses in the 20’s), while longer hemlines are associated with economic downturns (think longer dresses during the Great Depression of the 1930’s). In recent times, this concept has extended to hair length and color.

The year 2009 brought us the term Recession Hair, used to describe people growing their hair out and waiting longer and longer between haircut and styling appointments, an effect of the stock market crash of 2008.

Flash forward to 2025 and this frugal hair trend is, well, trending again [3]. In fact, many people are forgoing trims and trying DIY treatments or choosing drugstore haircare alternatives [4]. One way of framing this is the longer a person’s roots get, the rougher the economy is, or at least people’s view of it.

Speaking of roots...

The Rise of the Recession Blonde

Not only has Recession Hair returned in 2025, but so is what the viral gods of TikTok have christened, “Recession Blonde.”

Recession blonde creates natural-looking blonde tones that blend seamlessly with your natural root color as it grows, eliminating the need for frequent touch-ups. designed to extend time between salon visits during economic uncertainty.

Similarly, "recession brunette" focuses on rich, multi-dimensional brown tones that complement your natural hair color. Rather than dramatic color changes that create obvious regrowth lines, this approach uses your natural shade as a base and enhances it with depth and dimension. The result is a low-maintenance color that looks intentional even as roots appear.

Both techniques prioritize longevity over dramatic transformation, helping cost-conscious clients maintain beautiful hair color without the financial pressure of frequent salon visits. You may have experienced an uptick in demand for recession-friendly styles and coloring. But that’s not all you may have noticed at your salon...

5 Warning Signs in Your Salon

Tracking national, or even global industry trends, or glueing yourself to social media for the next recession-based beauty movement can seem daunting. It's better to get a sense of what is affecting your business day by day. To this end, the data in your salon’s reports will become your best friend.

Look for the following signs:

Decreased Demand for Luxury Services

Pull up your sales reports from last year. A marked decline in sales for luxury services and products isn’t a recession marker, per se, but it shows that clients who once booked these services regularly are becoming more frugal. They might be feeling the economic squeeze.

A Rise in Cancellations

If your calendar shows that your hardest-working employees are getting bitten by the no-show and cancellation bugs, it may be time to investigate. Dive into your cancellations & no-shows reports. A rise in last-minute cancellations can reflect consumer confidence. But don’t stop here. Do some digging into which services get cancelled the most.

Oh, and if you don’t have a cancellation and no-show policy, now is the time to make one and don’t be afraid to be firm about it.

Fewer Bookings Overall

Is your calendar showing more and more blank spaces? Are there fewer pre-bookings than in the past? If you’re nodding “yes” or even “kinda?”, it’s time to pull your appointments summary report.

Remember that this data doesn’t just tell you that bookings are down; it tells you when your slowest days and times are. If you must cut hours, or move different employees around different time slots, this should help you to do so strategically.

Your Promotions Are TOO Successful

We know what you’re thinking, and, yes, it’s crazy to imagine high-performing seasonal specials as ill omens. We all love value and a good deal, no matter what economic conditions are. But higher engagement with discounts and deals combined with a drop-off in appointments and a rise in cancellations could mean that clients won’t book/buy until they see savings attached.

Check your reports, in particular:

The open and click-through rates for promotional emails & text message campaigns
The overall sales numbers from deals and specials

Higher Costs

Rising costs of products, rent, utilities, and staff wages can put a strain on your salon’s budget. Your inventory is ground zero for all of this, so you’ll want to perform an audit. Begin with an inventory summary and go from there. Watch for the following warning signs:

Sudden changes in your monthly invoices. For example, if your color supply orders jump, or you start seeing new "tariff surcharge" or "supply chain fee" line items on bills.
Distributors raising minimum order requirements for wholesale pricing. This forces you to tie up more working capital or accept higher per unit costs.
You're running out of popular products faster because bulk ordering becomes financially prohibitive

Recession-Proofing Your Salon: 5 Strategies

So, as people figure out how to Recession-proof their hair and roots, how does your salon compensate? The good news is that experts warn against cuts, highlights and coloring at home, as paying a professional stylist to fix a botched DIY attempt can be more costly than getting them done the right way in the first place.

You’ll always be needed, and you’ll wang to lean into your bread-and-butter services (cuts, styling, etc..). But to keep your profit margins securely in the black, consider the following strategies.

Market Affordable Services

You can adapt by offering more affordable service options that emphasize value, longevity, and self–care for your clients. At the same time, the key is to shift toward services where your expertise and time are the primary value, rather than expensive imported products that are subject to tariff fluctuations.

Some examples include:

Root stretches & root touch-ups
Low maintenance styles (root-smudge balayage, etc.)
Blendable coloring services (allows for more forgivable grow out)
Glosses & Toners (Lower product cost than full color processes)
Partial highlights (foils around face only)
Color glazes (Refresh faded color without full processing)
Dry cuts (Skip the shampoo and styling to reduce cost)
Express blowouts (Basic styling without bells and whistles)

Create Service Bundles

The key here is bundling complementary services that maximize appointment efficiency for you (time is money) while giving clients genuine savings and convenience.

Here is a simple example:

"Maintenance Packages" - This quarterly package may include a cut + root touch-up + eyebrow trim for $180 (versus $220 separately). This saves setup/cleanup time while the client saves money and books multiple appointments upfront.

Shift Your Retail Strategy

If you know that your clients are trying to save money, then frame your retail strategy around helping their hair coloring last longer at home. Stock and market plenty of color-treated shampoos and conditioners, or purple/sulfate-free shampoos, which help reduce brassiness between visits.

Your clients will appreciate your selflessness. All the way to the checkout counter. With an armload of products. Be sure to structure deals and incentives around these product bundles.

If you’re wondering whether these kinds of products are affected by tariffs, here’s a quick way to find out**:**

Ask Your Distributor - Request HTS codes and country of origin for each product line (Shampoos fall under HTS Code 3305.10. Other hair preparations, like conditioners use HTS Code 3305.90)
Check Product Labels - Look for "Made in..." information
Use Official Tools - Search the official HTS database at the Harmonized Tariff Schedule (HTS) website. [5]
Contact Manufacturers - Get documentation showing country of origin and any tariff exemptions

To maintain your retail product margins, explore switching to US-based manufacturers and product lines or purchasing directly from manufacturers instead of through suppliers.

Raise Your Prices

The “we’re-raising-our-prices talk” is always an awkward one to have with clients, but if costs are rising, so must the cost of your services and products. Without adjusting your rates, you are slowly allowing money to leak out of your business.

There’s a lot to consider when creating your salon’s price list. Here’s a (very simplified) example of how you’d raise prices because of tariffs:

Before Tariffs:

Full highlight service: $150
Product cost: $35 (professional bleach, toner, conditioning treatment)
Labor and overhead: $85
Profit: $30

After 25% Tariff Impact:

Same service with increased product costs: $43.75 ($35 + 25%)
To maintain the same $30 profit margin, the service should cost $158.7. Raise the price to $160 (absorbing some increase to stay competitive).
Perhaps in a few months, add value by including a "take-home gloss treatment" and raise it to $170.

The above are just simple examples of how you’d go about a tariff-induced price increase. Every business is different, and pricing depends on your salon’s profit margin. Explain to clients in a mass email that the increases are due to supply costs, not arbitrary profit-taking.

Remember, also, that your prices should reflect your market and client demographics. Pricing yourself literally out of your own neighborhood is a sure way to lose even the most loyal clients, fast.

Adopt Tiered Pricing

Tiered pricing is a way to make those price increases above more palatable for clients, while still being profitable to you. It allows your clients to choose their comfort level based on current budget constraints, capturing revenue at lower price points rather than losing customers entirely to economic pressures.

Instead of forcing clients to pay full price or go elsewhere, you can attract new price-conscious customers while retaining luxury clients.

Here is an example of some simple color service tiers:

Basic Color ($85) - Single-process color using standard brands, towel dry finish
Premium Color ($125) - Professional European color lines, includes toner and basic styling
Luxury Color ($165) - Top-tier products, custom color matching, full styling, and take-home touch-up kit

You can see that tiered pricing creates natural upselling opportunities. It also helps you utilize slower time periods, and junior staff more efficiently while giving clients a sense of control over their spending.

Works Cited