Barbershops and rising costs are putting a strain on hairdressers

Since 2010, the number of companies has increased by almost half 10.415 increased. One-person companies (EPUs) in particular have increased: Mobile hairdressers and businesses with limited offerings, including Barber shops fall that specialize in men’s haircuts and beard care. EPU are now making almost 58 percent of the companies.

Fewer employees

The number of employed people has fallen by a quarter since 2010 to around 15.500 sunk. Sales continued to decline last year. That was industry-wide Minus 3.4 percent . This year too, more than a third of companies are reporting declining income. Sales only increase by 13 percent.

The cost pressure is causing many hairdressing businesses to struggle for economic survival, according to the Federal Guild of Stylists and Hairdressers Austrian Chamber of Commerce (WKO). Those particularly affected are the “system maintainers” in the industry, as the Chamber of Commerce calls them, companies that train apprentices and create employment.

The cap on basic funding for apprentice training is therefore not a good thing. Industry representatives criticize that it particularly affects small training companies. The number of Apprentices has fallen by more than half in the past ten years. Last year, just over 2,200 apprentices were trained.

Call for a reduction in VAT

The demand is for the government to increase sales tax from the current 20 percent 10 percent to trim. Over 85 percent of the costs are attributable to labor, the purchase of goods is lower than in other industries, which is why input tax deduction is hardly effective, says the Federal Guild Master Wolfgang Eder .

A reduction in VAT would also reduce tax inequalities between employer companies and EPUs. The latter are exempt from VAT under the small business regulation if the turnover does not exceed 55,000 euros per year.

The loss of income for the budget would be manageable, it is calculated Stefan Jenewein from the Society for Applied Economic Research (GAW). The hairdressers are only for 0.2 percent responsible for sales tax revenue in Austria. After refinancing effects, the net tax losses for the state would only be 25.3 million euros amount. The lower sales tax would also result in almost 10 million euros being shifted from the shadow economy to the official economy, according to Jenewein.

More visits to the hairdresser

It is said that falling prices would also result in more frequent visits to the hairdresser. In a survey commissioned by the WKO, at least 35 percent of those surveyed said they would then want to go to the hairdresser more often.