Hairdressing is frequently sarcastically referred to as “recession-proof” because it is one of the last expenses that people cut back on during hard times. According to Nick Arrojo, proprietor of Arrojo Studio in New York and former star of TV’s “What Not To Wear,” people will wear old clothes but find it difficult to forego a decent haircut. “It’s a pretty tough business.”
Is the salon sector immune to the downturn?
“We were founded out of a recession, therefore recessions don’t worry us,” Kilmer-Purcell remarked.
Beyond its own operations, it’s understandable that Beekman 1802 is optimistic about the coming year. While predictions of a recession in 2020 continues to echo, unemployment remains low, and trade-related risks have been mostly avoided.
The beauty industry has long been regarded as a recession-proof industry, as consumers can still afford cosmetics even when they can’t afford more extravagant expenditures such as cars or homes. However, the widely quoted lipstick index, coined by The Este Lauder Companies chairman emeritus Leonard Lauder and indicating an 11 percent increase in lipstick sales during the 2001 recession, is an ambiguous marker today. According to third-quarter NPD statistics, the biggest category in beauty, makeup, has witnessed a 7% year-over-year decline to $1.3 billion.
“The NPD Group’s executive director and industry analyst, Larissa Jensen, stated, “Beauty is not recession-proof.” “We watched every category struggle in 2008 and 2009. Will there be growth categories if there is a recession in 2020? Yes, but we have no clear indication of what they are at this time.”
Tinted moisturizers, eyebrow products, and lip glosses, according to Jensen, are current bright spots in color cosmetics, reemphasizing a return to the no-makeup look. This haste to “After the 2008 recession, in September 2009, “the natural look” was also a hit. Less of a makeup routine usually means less money spent.
As a result, skin care may be the beauty industry’s recession-proofing strategy. According to the most recent NPD data, the category sold $1.4 billion in the most recent quarter. However, premium players are no longer limited to established names like as La Mer; newcomers such as Dr. Barbara Strum and Augustinus Bader offer products that sell for $350 and $265, respectively. As beauty prices have risen to such high levels, and cross-segment purchasing has grown more common as a result of masstige brands, the formerly obvious trade-down impact has become less obvious.
“What you’re seeing in makeup is more of a category cycle than a recession. When there are more pricey skin-care options than ever before, makeup could do better and rebound during softer times,” said Rich Gersten, partner at Tengram Capital Partners.
Merz Aesthetics, a beauty company, does not expect the 2020 recession to stymie its newest expansion plans Merz just restructured its global pharmaceutical business to focus solely on its beauty clientele.
“If indicators point to a recession, we feel it will have a minor impact on our expansion ambitions,” said Bob Rhatigan, Merz Aesthetics’ global CEO. “During the 2008 recession, the non-invasive medical aesthetics sector did not shrink, and the usage of injectables like neurotoxins increased. People still want to feel good in difficult economic circumstances, and looking good will help them do so.”
What Rhatigan was alluding to with injectibles was similar to what Gersten saw with salon services in 2008. Gersten was part of L Catterton at the time, which controlled Frdric Fekkai.
“There are some services that certain clients will not give up,” he stated. “They may extend the time between appointments by one or two weeks, but at the end of the day, there are treatments linked to one’s looks that will not be abandoned.”
Jensen has higher-than-average hopes for DTC beauty brands like Glossier, which have sprung up after the 2008 financial crisis.
“It is dependent on the kind of your business. Madison Reed didn’t exist ten years ago, and I believe it has a good chance of succeeding since it’s better than drugstore hair color,” she remarked. “It’s like buying something in a salon, but at home.”
DTC brands have more control than many omnichannel peers because they don’t have the overhead margins of wholesale partners or the constant promotional activity that the beauty industry has opted for recently.
“Direct-to-consumer firms have the advantage of being able to control prices more easily, discount when they want, and promote when they need to. “They also have a better way of communicating those changes to customers,” Gersten added.
Which companies are recession-proof?
The only industries that remain unaffected by a recession are those that are recession-proof. They are perfect industries for meeting people’s basic needs, whether in the form of a service or a product. Despite being financially strained, consumers’ needs are continually oriented to their trade, so they will most likely thrive and withstand the effects of the crisis.
The economic destruction has been mostly caused by the coronavirus for more than a yeara health disaster that continues to bring deaths and recession around the world. Even in the face of adversity, it is never a bad idea to create chances and lean into the challenges.
Take, for example, Disney. The company was created as the Great Depression was sweeping the country. The Disney brothers realized that America needed to be cheered up again in a moment of terrible despair. They were able to expand their firm as a result of this chance, and they were able to overcome the recession’s problems.
As a result, in current downturn, every individual, business, and investment should rethink their options and seek refuge in the so-called recession-proof industry.
The 9 best recession-proof enterprises that can survive this critical era are listed below, in no particular order.
Grocery and Food Stores
In an economic downturn, the food business and grocery stores, unsurprisingly, thrive. During the recession, profits in grocery stores, fast food restaurants, and retail businesses were relatively stable. A good example is the frozen meal and coffee industry. Frozen food manufacturers should anticipate a 4.8 percent increase in total sales. The retail coffee market, on the other hand, increased by 6%, a significant increase over the initial prediction of only 2%. No crisis, not even the apocalypse, is likely to stop people from eating and drinking.
However, this industry may still be vulnerable to the recession’s consequences. During the past recession, each household’s food consumption fell by 7%, possibly because customers were more likely to buy on sale and discounted items or hunt for cheaper alternatives to minimize costs. However, the reality is that consumers can only cut their food spending so much.
Consumers’ eating habits are stimulated and increased in times of crisis, which is interesting. When people are worried, they crave and eat more, especially sweets and alcohol. During the Great Depression, popular chocolate bars such as Snickers and Mars were created. Cadbury chocolate sales have reportedly increased by 30% in tandem with McDonalds’ amazing business development during the 2008 recession. As a result, the food industry is one of the most recession-resistant industries.
Accounting and Tax Services
It must be so tempting to avoid paying those taxes! Regardless of whether there is a recession or not, taxes must be paid on time or face the repercussions.
What’s even worse is when an individual or a corporation tries to do their own bookkeeping in the hopes of saving money. While it appears to be a quick gain, there is a great deal of danger involved, and incorrect calculations could backfire and cause more problems down the road.
Resources should have been safeguarded by this stage, rather than causing potential harm. Entrusting a trained accountant to deliver the work while you focus on and target revenues is a prudent decision to make, especially during difficult circumstances.
Accounting firms are another business area that thrives during economic downturns. It is extremely important for firms to have a robust accounting and bookkeeping system in place during recessions.
In times of slowing economic development, a company’s initial instinct will be to decrease costs and keep its finances under control. When cash flow is limited, many businesses will want accounting assistance. When a business is in trouble, an accountant’s skills are needed to review spending, manage remaining resources, and offer sensible advise on how to resolve financial issues.
Unfortunately, most business owners are unaware of their tax obligations. Accounting assistance will be able to tell you where these tax benefits can help you. More importantly, these experts will assist a person in navigating and comprehending the latest adjustments in company regulations brought on by the COVID-19 pandemic. When an economic downturn strikes, it is critical to rely on accounting help.
Financial Advisors
Have you noticed that a growing number of financial advisors and money managers are emerging from the shadows recently? The most basic explanation is that they are in the business of providing services that people will require as the market falls. To put it frankly, their work was designed specifically for current economic downturn.
Business owners, investors, and people with significant investments and assets all want to protect their fortune and ensure that they are well taken care of in the event of a disaster.
It is only normal for us to be concerned and defensive with our resources during a downturn in the economy. Financial advisors frequently advance at this phase because their profession is in high demand. Their sound guidance will inform investors about the various types of investment accounts available.
Information Technology
I.T. occupations are clearly the most in-demand and recession-proof profession in today’s age of technical breakthroughs. Its major task is to promote innovation, which leads to business success. In reality, the current recession is one of the reasons for increased web traffic, which leads to increased sales.
Every department in today’s business world relies on information technology to improve their work method and strategy. A company can’t function without information technology. During this epidemic, the information technology industry has shown a lot of potential for enterprises, especially now that the work-from-home experience is widely accepted. More businesses are allowing employees to work from home.
Close, on the other hand, is an internal dialer software designed to help every sales team achieve maximum growth and productivity. By bringing predictive dialers to their firm and so producing more sales, a company may stay ahead of their competitors with this creation. The website has been up and running since 2013, and it is still developing. This is an excellent example of how information technology modernisation benefits the business world.
Furthermore, Information Technology is one of the key factors that has contributed to the expansion of international trade and markets in recent years. Businesses that engage in linked assets and exploit information technology get closer to the international market, perhaps growing sales despite the recession.
We’ll even go so far as to argue that, in order to increase efficiency, every industry today will need to include information technology. Their service has shown to be beneficial to businesses. Businesses that refuse to adapt to technological improvements face a gloomy future. There are several compelling reasons why information technology is regarded as the world’s fastest-growing industry. Their services are required today and will continue to be required in the future.
Telecommunications
The Telecom business, like Information Technology, is here to stay, regardless of the economy. The consequences of the Coronavirus outbreak only served to emphasize the industry’s importance today.
To communicate online, people need their phones, among other things. As a result, the industry became inextricably linked to the global economy. People are interested in learning how to talk naturally in the local language of their clients as a result of the globalization of consumers. Furthermore, as the telecom industry has innovated, online enterprises have thrived alongside it.
Many people have been able to make money and learn new skills without having to leave their homes thanks to the online sector. People can also sell products online as a result of this sector.
Furthermore, the pandemic breakout prompted institutions to follow suit. Since the implementation of social distance, telecommunication has become a prerequisite in educational institutions, along with the instantaneous rise of study materials.
Despite the fact that some consumers have reduced their devices, telecommunications sales continue to grow, demonstrating that it is one of the most recession-proof industries. Even before the pandemic, the sector had demonstrated its efficacy, and it will undoubtedly play a key part in the current global catastrophe.
Healthcare Services and Providers
Someone will become unwell every now and then. When people are sick, they will always seek medical help, even if their funds are limited. Because of its price inelasticity, the healthcare industry might be considered recession-proof.
Clinical institutions and medical occupations are among the few industries that are unaffected by economic downturns. In difficult economic circumstances, this company is unlikely to cut costs and retrench.
For example, during the Great Recession, the Occupational Employment Statistics (OES) assessed nurse employment in the United States. Focusing on the recessionary years of 2007 to 2010, the study found that, despite a nationwide job loss of roughly 7,257,090 million jobs, nurse employment increased by 7.6% over the same period.
Healthcare and food (discussed before) are two key industries that can thrive during a downturn. We’ve even seen the public health response to the COVID-19 outbreak today, and how healthcare providers play a key role in the midst of unprecedented financial instability.
However, due to the unique circumstances and emergencies brought on by the pandemic, several medical industries, such as surgeries, were forced to close and were unable to thrive in comparison to past recessions. Furthermore, we thank our COVID-19 front-line fighters who are risking their lives to combat the virus at this critical time. Doctors and nurses in the front lines, in particular.
Auto Maintenance and Utility Services
During recessions, companies that focus on utilities, repair, and maintenance will likely survive and prosper. People are even returning to do-it-yourself crafts and mending items on their own. Some fixes, however, are simply beyond our control. This is where the service industry comes into play.
Things will eventually fall down as time passes. The so-called wear and tear elements on autos will require special attention. Plumbers will need to inspect a leak in water pipelines for utilities. During times of adversity, the services provided by these handymen remain unaffected. This is also true of companies who sell tools and materials for home and car improvement.
Furthermore, as the current epidemic continues to spread around the world, coronavirus cleaning and disinfection services are gaining popularity as they become more valuable to businesses and residences affected by the outbreak.
Despite widespread uncertainty and the arrival of the new normal, utility services remained afloat and continued their operations alongside new cleaning-related enterprises. You might wonder why this is the case. The simple reason for this phenomena is because such services are already recognized necessary by the general public, particularly in light of today’s global health crises.
Furthermore, with the rise of work-from-home setups in our shelter, the utilities industry is unlikely to fade away anytime soon. Furthermore, businesses would need to engage cleaning services to ensure cleanliness and avoid being cited for health breaches. As a result of post-pandemic ramifications, this sector is here to stay.
The bottom line is that, as a result of the pandemic, everyone appears to be more concerned about hygiene. As a result, demand for cleaning equipment and commercial cleaning services increased dramatically. Cleaning is unquestionably one of the few industries that thrived throughout the COVID era.
Children’s Goods and Dating Industry
Diapers, milk, and bottles, among other basics for a newborn, are almost recession-proof. You must provide for your child regardless of your financial status when you are raising a child. As a result, firms that sell infant and childcare supplies can weather a downturn and rarely fail.
For the sake of their children’s health, parents are now compelled to confine them within their houses. The times have changed, and most parents are now responsible for teaching and entertaining their children. As a result of the pandemic’s consequences, the number of purchases of children’s books, games, and crafts increased dramatically.
Even children’s toys and clothing are recession-resistant for both practical and emotional reasons. The total sales of children’s toys in the United States increased by 27 percent in March of last year. Parents cannot deny the reality that their children grow up quickly, necessitating the purchase of larger clothing and shoes. And, while a toy is only a “wish,” parents will require it to calm their children.
Parents, being the loving, caring individuals that they are, would rather save money in other areas than forego their children’s necessities.
Another consequence of the COVID-19 pandemic today is disturbed family planning, which leads to unwanted pregnancies, as a result of long-term lockdowns and community quarantine. As a result, while starting a recession-proof firm, childcare items cannot be disregarded.
Nonetheless, family planning is still important and should be followed. When family planning is stated, individuals are likely to interpret it as non-sex information. Birth control is only encouraged by family planning. Couples can still be affectionate and fun with lingerie and other such items, but they must use prudence.
On that topic, the pandemic epidemic has shown the corporate world that the dating sector is still alive and well, and recession-proof. As it happens, one piece claims that consumer interest in the subject has not waned.
Courier Services
This is what sets courier services apart from other companies. With the rise of E-commerce during this pandemic, freight and logistics companies are well-positioned and unfazed in today’s global market.
Similarly to maintenance and utility services, industries that provide delivery services are able to stay afloat during economic downturns. During today’s crisis, social distancing established around the world had a good impact on the freight business. Even routine errands like grocery shopping are now available through delivery services like the Grab App, one of Southeast Asia’s most popular mobile apps for consumer mobility. Of course, this means that the industry will have to adjust to the pandemic’s changes.
However, the sector has become sufficiently diverse to reap significant benefits and profit from internet transactions. Furthermore, shipping behemoths may save millions by leveraging fuel, a commodity that often falls in price during economic downturns.
Whatever economic condition we are in, courier services will continue to thrive since consumers are obligated to send parcels from time to time, whether for personal or business reasons. Being able to function and provide that one-of-a-kind kind of support to customers makes them less vulnerable to economic downturns. Furthermore, their ability to target both the BTC and BTB sectors earns them a place among the top recession-proof enterprises.
Are barbers recession-resistant?
Hair never stops growing… barbering has always seemed to withstand the test of time and economic downturns. While you may believe the barber is out of style and on his way out, the reverse is true. Barber shops with a whole new generation of younger customers are cropping up all over the place in urban areas. Consider some of the reasons we believe the barbering industry will thrive in the future!
- When your tools of the trade, such as clippers and shears, are so portable, your job can take you almost anywhere. Nothing is off bounds, from working around town to traveling with a sports team. When you’re a fantastic barber, you can find work almost anywhere. That isn’t going out of style anytime soon!
- A haircut is not voluntary in the military; it is a requirement for the majority of service members. As a result, working on a basis is one of the most dependable barber jobs available! Not only is it a terrific method to stay in business, but it also gives you the opportunity to give back to military members in your own unique manner by ensuring that they are constantly in good condition for inspection.
- You can trust someone with anything when you can trust them with your hair. Many men and women visit the barbershop not only for a wonderful haircut, but also to talk to their barber about anything. Men, like women, have the urge to vent from time to time. But don’t worry; whatever is said in the shop remains in the shop.
- With the rise in popularity of social media, it appears that a new trend emerges every day. To stay up and obtain those ideal selfies, you’ll need the help of a competent barber!
- Barbering is no longer solely a man’s domain. Women have made significant contributions to the barbering industry. And they could just know what ladies enjoy on the inside. Call it intuition or whatever you want to call it, but if we’re all in this together, it’s a trade that won’t go away.
You’re an artist as a barber. Your client is your canvas, and your shears are your paintbrush. It is amazing to create new looks and make clients feel good about themselves. And every man should have a go-to specialist who can make him look amazing from head to toe! Check out the barber programs in your area if this sounds like something you could get your clippers around. There are numerous of jobs available, so contact your state licensing board to find out how you may shave and trim your way to a successful future!
What are the recession-proof investments?
A number of vital services in the home restoration and repair business are recession-proof. With annual spending on home improvements in the United States exceeding $400 billion, it is an industry with a lot of room for growth.
Here are a few good business ideas that are still in demand even during economic downturns.
Plumbing: When a plumbing issue arises at home or at work, it is simply not possible to wait until a more financially secure time to have it repaired.
Auto Repair Services: Because many individuals rely on their vehicles and trucks to commute from home to work and cannot afford to be without one, auto technicians will be in high demand throughout a downturn.
Why is the beauty sector immune to economic downturns?
Some of the first things that come to mind when people think of recession-proof businesses and industries are the supermarket and IT sectors. Everyone needs to buy food and communicate, but there’s also an innate urge that comes out when they’re depressed. Regardless of the circumstances, evidence reveals that the ordinary individual wants to feel good about herself. This is why the beauty industry is regarded as one of the most recession-resistant sectors of the economy, and it is something that anyone seeking for a job should investigate.
What is the economic impact of lipstick?
When customers nevertheless spend money on tiny indulgences during recessions, economic downturns, or when they individually have little money, this is known as the lipstick effect. They don’t have enough money to buy big-ticket luxury products, but they do have enough money to buy tiny luxury items like expensive lipstick. As a result, businesses that profit from the lipstick effect are more resilient to economic downturns.
Which companies prospered during the Great Depression?
Chrysler responded to the financial crisis by slashing costs, increasing economy, and improving passenger comfort in its vehicles. While sales of higher-priced vehicles fell, those of Chrysler’s lower-cost Plymouth brand soared. According to Automotive News, Chrysler’s market share increased from 9% in 1929 to 24% in 1933, surpassing Ford as America’s second largest automobile manufacturer.
During the Great Depression, the following Americans benefited from clever investments, lucky timing, and entrepreneurial vision.
What companies perform best during a downturn?
- While some industries are more vulnerable to economic fluctuations, others tend to do well during downturns.
- However, no organization or industry is immune to a recession or economic downturn.
- During the COVID-19 epidemic, the consumer goods and alcoholic beverage sectors functioned admirably.
- During recessions and other calamities, such as a pandemic, consumer basics such as toothpaste, soap, and shampoo have consistent demand.
- Because their fundamental products are cheaper, discount businesses do exceptionally well during recessions.
In a downturn, where should I place my money?
Federal bond funds, municipal bond funds, taxable corporate funds, money market funds, dividend funds, utilities mutual funds, large-cap funds, and hedge funds are among the options to examine.
What are two items that are recession-proof?
At least one of two main concepts governs recession-resistant enterprises. Both are used by some of the most stable and profitable industries.
- The given product or service is a less expensive alternative to another product or service.
- The product or service given is a necessity that cannot be avoided.
Let’s take a closer look at the two elements that make certain sectors recession-resistant.
Low-Cost Alternatives
In a circumstance when consumers must spend less moneyeither because it is difficult to obtain work, their income is stagnant, or other prices are risingconsumers will seek out low-cost alternatives to save money. This is why organizations and sectors that have a low-cost competitive edge fare better during a downturn.
Discount Stores
Only 25 equities in the S&P 500 achieved positive returns during the Great Recession of 2008, with Dollar General at the top. While there are other factors at play, Dollar General did well during this period in large part because these stores offer low-cost alternatives to core commodities like food, detergent, and basic apparel.
Low-Cost Products
Few products are as well-known as Campbell’s Soup when it comes to the ability to weather a recession on an individual level. Campbell’s Soup did well during the 2008 recession, as it has done in the previous 28 recessions in its 139-year history. Campbell’s Soup, like Dollar General, benefits from both recession-proof principles: food is a staple, and a can of soup is about as cheap as it gets.
Repair Shops and Consignment Stores
Buying new is generally not an option during a recession. Repairing an existing item or replacing it with a used one is a low-cost option to this. As a result, thrift stores, pawn shops, and repair shops are recession-resistant enterprises that typically do better during downturns. When money is tight, auto repair firms thrive because mending a big-ticket item like a car is far more realistic than buying a new one. Large resale marketplaces like Ebay offer a diverse range of things at low rates, which might satisfy a specific need or provide some relief and pleasure when circumstances are rough.
Needs
It’s simple to see why necessities create recession-proof industries. There are some things and services that are hard, or nearly impossible, to live without, even when times are tough. Businesses that meet a demand remain steady or perform better during recessions.
Food, water, and shelter are typically the first things that come to mind. Medical treatment and pharmaceuticals, hygiene goods such as soap and toothpaste, and basic services such as power and garbage pickup are all examples of necessities. Some businesses, as previously indicated, combine needs with low-cost alternatives, resulting in low-cost items that meet needs.
Medical Services
Medical services were three of the top ten best-performing equities during the 2008 crisis. This includes, for example, hospitals, pharmaceutical companies, and medical equipment makers. The necessity for medical services during a recession is obvious, as recessions increase stress and make maintaining a healthy lifestyle more difficult.
Logistics
Trucking is certainly not the first thing that springs to mind when you think of a need, but it is an important service that takes place behind the scenes. Whether it’s trucks, railcars, ships, or planes, every product that makes its way into stores or between production facilities passes via logistics. Despite the fact that demand for commodities is declining as the economy slows, logistics services remain stable.
Packaged Food and Bottled Water
Food and water are important even in the most desperate of circumstances. Consumers stock up on nonperishable food and clean water during recessions because they are worried about the future. Affordable commodities having a lengthy shelf life, such as Campbell’s Soup, and bottled water, encounter spikes in demand, especially during unpredictably occurring events. In reaction to COVID-19, bottled water sales jumped 52 percent during the initial lockdown period, while ice and water vending sales increased 10 and 30 percent, respectively, over the same period last year.
There are a few other issues to consider during the COVID-19 pandemic-induced recession. Soap and sanitizer sales have surged more than would be expected in prior recessions due to the demand for cleaning and sanitation. In reaction to health difficulties, medical services are anticipated to increase much more than usual. As a result of the closure of many public places such as restaurants and bars, sales in grocery shops and liquor stores have skyrocketed. Despite this, all of these enterprises are based on the concepts that make a sector recession-proof.