One of the NTI team was chatting to an important client this morning (Monday 21 November). They told us that business has grown about 25 per cent over the past six months and this is almost certainly just the tip of the iceberg.
"What are the signs?" we asked them.
"It is more the level and type of jobs, at the moment, rather than the number," came the response after a degree of consideration. "Bread and butter CVLs are trickling in, but so are bigger jobs."
What are the signs? Remit Consulting, the real estate agency, can help a little here. They report that occupancy rates in UK offices gradually increased after pandemic restrictions lessened, but dropped again this year, now plateauing at roughly half pre-Covid levels. For example, the amount of available office space in Canary Wharf, London has increased sharply since the main thrust of the pandemic, from around 2.3 million square feet to closer to 3.5 million square feet. Developers in the UK's capital are increasingly pessimistic about the strength of demand, and expect office space requirements to fall at least 10 per cent as a result of the shift to hybrid working. Sure (we think at NTI) triple that over the next five years, we reckon.
Another sign of the times is the state of the nation's skin, nails and hair. The FT reported today that just under half (49 per cent) of almost 700 high street hair and beauty salons surveyed by trade body the National Hair and Beauty Federation last month said they were confident in the survival of their business. More than half have raised prices for customers, and 77 per cent are paying more for energy than they were six months ago (where are the other 23 per cent getting their energy from? Next door's building society?)
Of course loads of sectors have raised fears about surging energy bills this winter (dry cleaners, pubs, gyms, delis, etc.), but high street salons and spas are particularly worried, given they must fund the cost of running numerous electrical gadgets as well as heating and lighting. The fragmented nature of the market, with the majority of salons turning over less than £250,000 a year and employing no more than five to 10 people, according to data from the Office for National Statistics, leaves them exposed. It is this type of business, the lifeblood of the high street, that is most at risk. With no Bounceback loans to bounceback to and small business bank lending fragile at best, we are going to be staring at a number of wooden hoardings in our shopping centres next door to pound shops and coffee emporia very soon.
David Paling, the owner of Tan Tan Tan, a chain of 10 tanning salons, warned that without further support from the Government, spiralling bills could sound the “death knell” of one of his outlets. We are sorry for David (who is a rather curious shade of tangerine), and don't think his input particularly assisted this article. We just loved the name of his business; 'Tan Tan Tan' (like we didn't get it after the first word). Mind you, he went on to say: “When you take one of your largest overheads, and you multiply it by six, you kill the salon, that’s done . . . the business stops at that point,” he said. “Without Government help, it closes.”
The news for David's and other 'discretionary service' businesses is that the Government won't be helping any more. There are too many hands and too little cash to hand out. David (and Simon's Spa and Grill and Suzie's Salon and Hair Today and Nails, Cuticles and Extensions) are on their own.
