Opening a hair salon in Melbourne CBD, VIC: Market & Competitor Analysis (2026)

52 hair salons currently operate in Melbourne CBD. That density means roughly one salon per 189 residents, or about one per $28,000 in weekly household income across the area. For practical purposes: you'd be operating in a heavily saturated market where customer acquisition relies on differentiation rather than scarcity.

No. The market scores 20/100 for strategic viability against a 48/100 opportunity rating. Competitive density stands at 100/100—the maximum saturation level. While foot traffic exists, the combination of oversupply and modest market opportunity suggests opening here carries substantial risk relative to other Melbourne locations.

D&Y Hair Design on Bourke Street and Aery Salon lead the market, both holding 4.8-star ratings with 764 and 1,122 reviews respectively. Rakis on Collins follows at 4.7 stars with 349 reviews. These three operators have established strong customer loyalty; the Competitor Strength Index of 58/100 reflects their consolidated market position.

The local population is 9,848 with average weekly household income of $1,511. This suggests middle-income customers, likely workers or residents passing through the CBD. Spending capacity exists but is moderate—you'd be competing for discretionary budget against 51 other operators targeting the same modest income base.

First, secure a lease in an underserved pocket—most saturation clusters around Bourke Street and Collins Street, so scout side streets or less-trafficked intersections. Second, conduct detailed customer demographic mapping by postcode to find the specific income and age groups nearest your potential location. Third, approach existing top-rated salons as acquisition prospects or partnership opportunities rather than pure competitors.