Fears for job losses as Tesco makes move on hair and beauty sector

Business support group warns of fears for job losses as Tesco makes move on hair and beauty sector.

The Forum of Private Business is warning that jobs in the hair and beauty sector could be at risk with Tesco now offering budget cuts and treatments in some of its stores.

The Forum says the recent development will be a concern to the thousands of independent high street retailers who have, until now, been relatively unscathed by supermarkets’ product diversification, which has seen moves into ranges such as clothing, music, and audio-visual.

Tesco has now become the first of the ‘big four’ supermarkets to make a move into the lucrative beauty sector, which employs around 250,000 people and is worth an estimated £8 billion a year in the UK, by offering women’s haircuts for just £12.50, as well as spray tans, nails and waxing.

The Forum is concerned that, unable to compete with larger rivals on price, small shops could be forced to close. “Over the past 10 years, all of the big supermarkets have moved into retail sectors other than their traditional grocery-focused background,” said the Forum’s chief executive, Phil Orford.

“Supermarkets now sell a multitude of products including TVs, music and clothing, which has all had a huge impact on the landscape of the British high street. Unfortunately, it seems Tesco is now looking to help itself to a piece of the one market where the supermarkets have so far not ventured. But where one goes, the fear is others will follow, and you have to wonder how long it will be before their rivals do the same.”

He added: “Offering in-store services like this will be just one more reason for shoppers not to visit their local high street. If this catches on and other supermarkets mimic Tesco, it could really hurt the independents. And with so many UK high street streets now bristling with outlets reliant on beauty-related products and services – most of them small, independent retailers – there could be a steep increase in empty units.”

As long ago as 2006, the All-Party Parliamentary Small Shops Group warned that, with around 2,000 small shops closing every year, the majority of the UK's independent retailers could disappear by 2015.

With wages falling and inflation continuing to surge, shoppers are always seeking discounted supermarket goods, concern at the Forum is that this could lead to increasingly tougher trading conditions on the high street.

The National Federation of Hairdressers has also voiced concern at Tesco’s plans. The group’s president, Mark Corey, also a salon owner, said: “The concern we have is Tesco getting its teeth into the retail products side. Most professional products like shampoos and conditioners are only available in salons, where sales account, on average, for about 14 per cent of turnover which is a considerable amount. I believe, with Clubcard points, people would be tempted away from buying in salons.”

He added: “There’s definitely a potential for worry, but it’s the sale of retail products that concerns me most. And if they start to operate these services in Tesco Express outlets, which would become a major issue for the market.”