UK: market growth in optics will be modest
An oversupply of opticians will make it more difficult for practices to achieve higher levels of profitability, next month's Mintel opticians report will conclude.
The respected market research organisation will state there will be a shake-out of the less profitable practices in a sector that grew 19 per cent between 1998 and 2003. 'Underlying demand is weak', the report stated. 'Retailers have encouraged consumers to trade up at the top end of the price spectrums by selling more complex prescriptions and better lenses. Designer labels have continued to perform well in spectacles. Meanwhile, typical spend on the cheapest spectacles has declined'.
Opticians UK 2004 calculated the market was worth £ 2.41 bn last year with a rate of growth below that of total retail sales in the UK. With improved levels of profitability harder to come by, optical retailers must identify those patients whose loyalty is up for grabs.
Mintel suggested that today's consumers fall into four categories: 'price seekers' (those likely to choose a 'good value' optician), 'quality seekers' (those looking for personal service and well-qualified staff), 'the demanding' (who want a health check and knowledgeable professionals), and finally 'habitual users' who will plump for the optician they have always used.
The report said that two of the big four, Vision Express and Boots Opticians, had lost market share, while Dollond & Aitchison had reversed a decline 'by becoming more promotionally minded', though at the expense of profit margin.
Specsavers Opticians, which has grown its market share in 2003, gained ground in Mintel's consumer survey for the report, with its brand being recognised by more of the public than the previous survey conducted by the research group in 2002.
Independents would remain a substantial part of the profession, with 'good independents resilient, because of high levels of loyalty among their customers'. However, those smaller businesses who failed to compete would close, Mintel warned.
Retialers large and small who communicated product advantages (for example added value lenses) would prosper. This was essential, Mintel said, as 'market growth over the next three to five years in this mature sector will be modest'.
(Source: Optometry Online)
