Barbershop: Competition Study

This article was written by our expert who is surveying the industry and constantly updating the business plan for a barbershop.

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The Dojo Business Team

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What is the current size of the barbershop market in terms of establishments and annual revenue?

The barbershop market in major metropolitan areas typically includes hundreds to low thousands of establishments, with total annual revenue reaching several hundred million dollars per city.

Individual barbershops generate average annual revenues between $300,000 and $400,000, though premium urban locations often exceed these national averages. The men's grooming sector, which includes barbershops, is experiencing rapid expansion with global annual growth rates above 6%.

The exact number of barbershops varies significantly based on population density and urban development patterns. Large cities with populations over one million typically support 500 to 2,000 barbershop establishments, creating a competitive landscape where location and service differentiation become critical success factors.

Market revenue concentration shows that while the industry includes many small independents, the top performing shops—typically franchise chains and upscale independents—generate disproportionately higher revenues per location. Premium shops in high-traffic urban areas can achieve annual revenues of $500,000 to $750,000, particularly when they successfully integrate add-on services and retail product sales.

You'll find detailed market insights in our barbershop business plan, updated every quarter.

Who are the main customers for barbershops in terms of demographics?

The primary customer base for barbershops consists of males aged 18–45, with secondary segments including teenagers, seniors, and families bringing children for haircuts.

Young professionals and business clients represent the high-value segment, typically earning mid-to-high incomes and willing to pay premium prices for quality service and convenience. This demographic often visits barbershops every 2–4 weeks and spends $40–$100 per visit when including add-on services.

Students and seniors form the value-oriented customer segment, prioritizing affordability over luxury experiences. These customers typically seek quick, reliable haircuts at lower price points ($20–$35) and visit less frequently, often extending to 4–6 weeks between appointments.

Lifestyle preferences create a clear market division: convenience-focused customers want fast, efficient service with minimal wait times and easy online booking, while experience-seekers value the ambiance, personal relationships with barbers, and premium grooming treatments. The latter group often views barbershop visits as self-care rituals rather than purely functional services.

Demographic trends show increasing diversity in barbershop clientele, with more women seeking specialized short haircut services and ethnic-specific grooming options expanding to serve diverse urban populations.

What are the most common services offered and how are they priced?

Barbershops offer a core menu of services with pricing that varies based on shop positioning, location, and service complexity.

The standard service offerings with typical pricing ranges include classic haircuts ($30–$50), buzz cuts ($25 and up), edge-ups or line-ups ($15 and up), beard trimming and shaping ($20–$40), and children's cuts ($20 and up). These represent the foundation of most barbershop revenue.

Premium grooming experiences that include scalp massages, hot towel shaves, hair coloring, and luxury packages command prices from $50 to $150 per visit. These services target customers seeking comprehensive grooming experiences and generate higher profit margins due to perceived value and limited competition.

Add-on services such as beard grooming and retail product sales (shampoos, styling gels, beard oils) increasingly drive average ticket values higher, with retail products typically carrying gross margins of 70–80% or higher. Successful barbershops strategically position these offerings to increase per-customer revenue without significantly extending service time.

What percentage of barbershops focus on quick, low-cost cuts versus premium experiences?

Approximately 55–70% of barbershops in urban markets focus primarily on quick, low-cost haircuts, while 30–45% position themselves as premium, full-service grooming destinations.

Quick-service barbershops build their business model on high volume and operational efficiency. These shops typically serve 15–30 customers daily per barber, with average service times of 15–25 minutes per haircut. They keep overhead low through streamlined operations, minimal wait times, and straightforward service menus priced between $20 and $40.

Premium barbershops take the opposite approach, serving 8–15 customers daily per barber with service times extending to 45–90 minutes when including add-ons. These establishments invest heavily in ambiance, comfort, and the overall experience, charging $50–$150 per visit and targeting customers who view grooming as a luxury experience rather than a routine necessity.

The market segmentation reflects broader consumer trends, with value-focused shops capturing the majority market share through accessibility and convenience, while premium shops achieve higher per-customer profitability despite serving fewer clients. Some shops successfully operate hybrid models, offering both quick cuts during peak hours and premium services by appointment.

Geographic location heavily influences this distribution—downtown business districts see higher concentrations of premium shops serving professional clientele, while neighborhood and suburban locations tend toward value-oriented, family-friendly operations.

Who are the top competitors in the barbershop market and what is their market share?

The top five barbershop competitors in major urban markets typically control 15–25% of total market share, with the remaining 75–85% distributed among independent operators.

Market leaders generally fall into three categories: national or regional franchise chains, upscale independent shops with strong brand recognition, and long-established community barbershops with loyal customer bases. Franchise chains like Sport Clips, Great Clips (which includes barbershop-style services), and V's Barbershop leverage standardized operations, national marketing, and loyalty programs to capture market share.

Premium independent barbershops compete through differentiation—unique atmospheres, celebrity barbers, specialized services, or cultural positioning. These shops often dominate local "best barbershop" lists and leverage social media presence to attract younger, style-conscious customers willing to pay premium prices.

Traditional community barbershops maintain competitive positions through decades-long customer relationships, neighborhood familiarity, and consistent service quality. While they may not lead in market share individually, collectively these establishments represent a significant portion of the market and demonstrate remarkable resilience.

Competitive dynamics vary significantly by neighborhood and customer demographic. In upscale urban areas, top competitors might be three premium independent shops and two luxury chains, while suburban markets might see competition dominated by value-focused franchises and established local operators.

This is one of the strategies explained in our barbershop business plan.

What are the average customer acquisition costs and retention rates for barbershops?

Customer acquisition costs for barbershops typically run 5–10 times higher than the cost of retaining existing clients, with standard retention rates ranging from 60–80% across the industry.

Acquiring new barbershop customers involves significant investment in local marketing, digital advertising, promotional discounts, and online presence. First-time customer acquisition can cost $50–$150 per customer when factoring in paid advertising, promotional discounts, and the marketing effort required to convert prospects into paying customers.

Retention costs remain dramatically lower—typically $5–$15 per customer annually—through automated appointment reminders, loyalty program management, and periodic promotional communications. Top-performing barbershops achieve retention rates exceeding 80% by implementing structured loyalty programs, consistent communication, and superior service quality.

Digital marketing has significantly impacted these metrics. Barbershops with strong Google reviews (4.5+ stars with 100+ reviews), active social media presence, and optimized local SEO reduce acquisition costs by 30–50% compared to shops relying solely on paid advertising. Customer referrals, when actively encouraged through referral incentives, represent the lowest-cost acquisition channel.

High customer churn—when retention rates fall below 60%—severely impacts profitability. Losing customers forces continuous investment in acquisition marketing, reduces revenue predictability, and prevents the business from benefiting from increasing lifetime customer value. Successful barbershops prioritize retention through relationship building, service consistency, and strategic use of digital engagement tools.

How many barbershops open and close annually, and what drives failure or success?

Several dozen barbershops typically open and close each year in major metropolitan markets, with net closures occurring nationally among independently owned shops due to rising operational costs and market pressures.

The most frequent reasons for barbershop failure include increased commercial rent (often cited as the primary factor), declining foot traffic in changing neighborhoods, inability to adapt to digital booking and marketing requirements, rising utility and operational costs, and inadequate cash flow management. Many failed shops underestimated startup costs or operated with insufficient working capital to weather slow periods.

Successful barbershops share common characteristics: strong digital presence including online booking and active social media, strategic location in high-traffic or underserved areas, clear market positioning (either value-focused or premium), effective cost management, and owner-operator commitment or exceptional staff retention. Shops that successfully integrate modern technology while maintaining service quality show significantly higher survival rates.

Franchise operations and digitally savvy independent shops demonstrate greater resilience than traditional independents resistant to technology adoption. The market increasingly favors shops that can efficiently manage online reputation, digital appointment scheduling, and modern payment systems while maintaining the personal touch customers expect.

Economic factors heavily influence opening and closure rates. During economic downturns, value-oriented shops often see increased demand as customers trade down from luxury salons, while premium shops face revenue pressure. Conversely, economic expansions benefit premium positioned barbershops serving professional clientele with discretionary grooming budgets.

What role do digital platforms play in attracting and retaining customers?

Digital platforms have become essential infrastructure for barbershop customer acquisition and retention, with online booking apps, social media, and review platforms now driving the majority of new customer discovery.

Booking applications such as Booksy, theCut, and integrated solutions streamline appointment scheduling, reduce no-shows through automated reminders, and provide convenient payment processing. Shops using these platforms report 20–40% reductions in scheduling-related inefficiencies and improved customer satisfaction through convenience and transparency.

Google reviews and online reputation management directly impact customer acquisition. Barbershops with strong review profiles (4.5+ stars and 100+ reviews) appear prominently in local search results and convert prospects at significantly higher rates than competitors with weak or sparse reviews. A single-star improvement in average rating can increase customer traffic by 10–25%.

Social media platforms—particularly Instagram, Facebook, and TikTok—serve multiple functions for barbershops: showcasing work through before/after photos, building brand personality, engaging with customers between visits, announcing promotions, and attracting younger demographics. Shops with active social media presence (posting 3–5 times weekly) report measurably higher new customer acquisition and stronger customer engagement.

Digital loyalty programs and customer relationship management systems enable personalized marketing, birthday promotions, and targeted re-engagement campaigns. These tools help shops maintain contact with customers, encourage repeat bookings, and increase lifetime customer value through systematic communication.

The digital divide increasingly separates successful from struggling barbershops. Shops without online booking lose customers to more convenient competitors, while those without social media presence fail to attract younger customers who discover services primarily through digital channels.

How important are add-on services in generating barbershop profit margins?

Add-on services now contribute 20–40% of total revenue for many barbershops and deliver substantially higher profit margins than basic haircut services.

Beard grooming services, premium treatments like hot towel shaves and scalp massages, hair coloring, and retail product sales provide gross margins of 70–80% or higher, compared to 40–60% margins on standard haircuts. This margin differential makes add-ons critical for overall profitability, especially in competitive markets where haircut pricing faces downward pressure.

Retail products represent particularly attractive profit opportunities. Styling products, beard oils, shampoos, and grooming tools purchased for resale typically carry 2.5–4x markup, and customers perceive value in professional recommendations. Shops that actively train barbers to recommend products and integrate retail into the service experience generate $5,000–$20,000 annually in retail revenue per barber.

Membership programs and bundled service packages stabilize revenue streams while increasing customer lifetime value. Monthly membership models offering unlimited haircuts or service credits at discounted rates create predictable recurring revenue and increase visit frequency, leading to higher overall spending through add-on purchases.

Gift cards and prepaid service packages generate immediate cash flow while ensuring future visits, and typically see 10–20% breakage (unredeemed value) that flows directly to profit. Strategic promotion of gift cards during holiday periods can generate significant cash flow boosts.

We cover this exact topic in the barbershop business plan.

What are the most common operational challenges barbershops face?

Barbershops encounter several persistent operational challenges that significantly impact profitability and sustainability.

• Staff recruitment and retention: Finding skilled, reliable barbers represents the single biggest operational challenge for most shops. High turnover disrupts customer relationships, requires constant training investment, and creates scheduling instability. Barbers with strong clientele often transition to booth rental arrangements or open competing shops, taking customers with them. Shops must balance competitive compensation with sustainable economics while creating work environments that retain talent.
• Commercial rent and real estate costs: Rising commercial rents, particularly in desirable high-traffic locations, squeeze profit margins severely. Rent typically represents 8–15% of revenue for successful shops, but can reach 20–25% in premium locations. Lease negotiations, location selection, and space efficiency become critical success factors. Some operators turn to shared spaces or less conventional locations to manage costs.
• Licensing and regulatory compliance: Barbershops must navigate complex state and local licensing requirements for both the business and individual barbers, health and safety inspections, and ongoing compliance obligations. Violations can result in fines, temporary closures, or permanent license revocation. Maintaining current licenses, insurance coverage, and regulatory compliance requires administrative attention that distracts from customer service.
• Utility and operational expenses: Energy costs for lighting, climate control, and equipment operation have risen significantly. Water usage for shampoo services, laundry for towels and capes, and disposal of hair waste create ongoing expenses. Many shops seek energy-efficient equipment and optimized operational procedures to control these costs.
• Digital adaptation and technology management: Independent shops particularly struggle to implement and maintain digital booking systems, maintain social media presence, manage online reviews, and integrate modern payment processing. The skills required differ substantially from barbering expertise, yet digital presence increasingly determines competitive success. Shops must invest time and money in technology or risk losing customers to more digitally sophisticated competitors.

How do customer expectations differ between independent barbershops and franchise chains?

Customer expectations vary significantly based on whether they visit independent barbershops or franchise operations, reflecting different value propositions and service models.

These differing expectations create distinct competitive advantages for each shop type. Independent barbershops succeed by delivering authentic, relationship-based experiences that franchises cannot replicate, while franchises win through operational consistency, technological sophistication, and convenience that many independents struggle to match.

Understanding and meeting these specific expectations becomes critical for success within each segment. Attempting to be everything to everyone typically results in meeting neither set of expectations effectively.

What emerging trends are reshaping competition in the barbershop industry?

Several emerging trends are fundamentally reshaping competitive dynamics in the barbershop industry, creating both opportunities and threats for established operators.

Sustainability and eco-consciousness are gaining significant traction among younger customers. Barbershops adopting eco-friendly products, water-saving equipment, sustainable towel programs, and zero-waste practices differentiate themselves in increasingly environmentally conscious markets. These practices appeal particularly to millennial and Gen Z customers willing to pay premium prices for businesses aligned with their values. Green certifications and transparent sustainability communications create marketing advantages.

Mobile barbershop services and in-home grooming are experiencing double-digit growth rates in major metropolitan areas. These services eliminate the need for physical storefronts, reduce overhead costs, and provide ultimate convenience for time-constrained professionals. Mobile operators serve corporate offices, residential buildings, and private appointments, capturing customers who value convenience over traditional barbershop atmosphere. This trend particularly threatens traditional shops in suburban and residential areas.

Luxury grooming experiences and spa-hybrid concepts are expanding upmarket. Barbershops are increasingly adding facial treatments, scalp therapies, massage services, and premium wellness offerings, blurring the line between barbershop and men's spa. These elevated experiences command prices of $100–$200+ per visit and target affluent professionals seeking comprehensive self-care. High-end real estate and sophisticated interior design investments support these premium positionings.

Hybrid spaces combining barbershops with complementary businesses—coffee shops, bars, lounges, retail spaces, or co-working areas—create destination experiences that increase dwell time and revenue per square foot. These concepts transform barbershops from service providers into lifestyle destinations, attracting customers for multiple reasons and increasing visit frequency beyond grooming needs.

Social media integration and "Instagrammable" experiences are becoming competitive necessities rather than advantages. Barbershops design spaces, uniforms, and service rituals specifically for social media sharing, recognizing that customer posts generate more authentic marketing than paid advertising. Shops actively encourage photo sharing through optimal lighting, branded backdrops, and shareable moments. Influencer partnerships and social media content strategies now rival traditional marketing in importance.

It's a key part of what we outline in the barbershop business plan.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Zipdo - Barber Industry Statistics
2. Kentley Insights - Barber Shops Industry Market Research Report
3. Dojo Business - Barbershop Customer Segments
4. Mangomint - Barbershop Menu Ideas
5. Kaders Barbershop - The Barber Shop Industry Facts and Figures
6. Dojo Business - Barber Shop Profit Margin
7. Bookeo - Barbershop Marketing Ideas
8. Modern Barber - Biggest Challenges Shop Owners Face
9. Adalo - Barber App
10. Strategic Market Research - Mobile Barber Shop Market