The "Stable but Cautious" Salon Industry: Key Trends from 2025 Q3 KIM Report

In a recent episode of Gordon Miller's Social Beauty Makers podcast, a spotlight was shone on the crucial KIM Report (Key Industry Metrics)—a data consortium powered by SalonInteractive that delivers statistically relevant, anonymized data from salon POS systems across the industry. The insights from a recent report covering the July-September quarter of 2025 reveal an industry navigating economic shifts by adapting both its business operations and client behavior.

Here are the critical trends and takeaways from the Q3 KIM Report, as told by Gordon Miller:

The Overall Mood: Stable but Cautious

While the beauty industry remains fundamentally stable, a clear sense of caution is prevailing. The third quarter of 2025 followed a usual seasonal dip, but the "August softness" amplified declines in visits, services, and retail. Pricing has generally held strong, which is a positive sign for the value of salon services.

Financial Performance: Healthy but Inflation-Tempered

On a year-over-year basis, the financial metrics show modest growth:

• Revenue: Up 2.73%. This is considered small but healthy growth, though it is acknowledged that inflation likely pulled the real growth down.
• Average Ticket: Holding strong at $87, indicating that when clients do visit, they are spending well.

A Major Area of Weakness: Retail Units

The biggest warning sign in the report is a significant decline in product sales:

• Retail Units Sold: Down 4.44% for the quarter and a staggering 7.63% in the big picture. Gordon identified this area as a "big area of weakness."
• Retail Revenue: Down nearly 2.5%. While price increases have helped revenue decline less steeply than unit sales, the trend of clients purchasing fewer products is an immediate concern for the industry.

Shifts in Service Demand

Service data also reveals a subtle but important shift in client priorities:

• Color Service Count: Down almost 2%.
• Color Revenue: Up slightly, though likely less than inflation.
• Color as a Revenue Share: Color services account for 38.35% of the overall industry business, down 1% for the quarter.

The Crucial Client Behavior Trend

The single most significant trend highlighted is how clients are managing their beauty budgets: Clients are stretching out appointments but are paying for higher-value services.

As the economy is perceived as difficult, clients are making their visits less frequent to save money, but they are opting for premium or more comprehensive services when they do come in, thereby maintaining or increasing their average ticket value.

Bigger Is Better: Performance by Salon Size

The report breaks down performance by the number of service providers, and the contrast is stark:

• Small Salons (1-1.5 providers): Experienced the "most softness," with visits and color services both down around 4%.
• Large Salons (20+ providers): Showed the strongest performance with revenue up 5.4%, visits up 2.3%, and color revenue up 6.85%.

The data strongly suggests that in this last quarter, bigger is definitely better—larger operations are demonstrating greater resilience and growth compared to smaller ones.

“You can learn a whole lot more and be watching all the media and listening to all the podcasts because we're all going to have access. And I think there's going to be a lot of talk about trends, about KPIs, benchmarks that you should be looking at for your own business. There's going to be a value,” Gordon said in closing. 

The Kim Report is a vital resource for the beauty industry, providing benchmarks and KPIs to help businesses assess their own performance. Interested in learning more aboutThe KIM Report? Book a guided tour HERE. 

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