Opticians and Optical Goods Market Assessment 2006
Key Note Publications Ltd, August 2006, Pages: 144
This Market Assessment report provides an analysis of the opticians and optical goods market, which includes, spectacles, contact lenses and solutions, laser eye treatment, private sight tests and general ophthalmic services. It updates a previous Opticians & Optical Goods Market Assessment report published in 2004.
The market has been affected by a number of regulatory changes since 2004, including amendments to the 1989 UK Opticians Act, which allowed major supermarket chains including Tesco, ASDA and Sainsbury's to sell contact lenses. Also important was the decision by the Scottish Executive to introduce free and more comprehensive eye tests for all in Scotland. If this move were to be copied in the rest of the UK, it would have important consequences for the industry.
Overall, the opticians and optical goods market showed fairly steady growth between 2001 and 2005. The UK population has an ageing profile, with an increasing number of people over the age of 45 — a group that generally has greater need of sight correction. This means that the pool of potential customers is steadily growing. In addition, the highly competitive nature of the optical sector is leading to extensive discounting, which is boosting sales, while demand for premium eyewear remains strong.
The spectacles sector has grown in value since 2001 as an indirect result of an increase in sight tests and also due to various sales promotions. However, the sector remains highly competitive and, despite an element of `trading up' to designer spectacles by some consumers, `two for one' offers are still widespread. The leading suppliers of spectacles and frames include Carl Zeiss/SOLA, Essilor, Luxottica, Rodenstock, Safilo, Silhouette and the UK-based Norville.
The contact lenses sector continues to develop, aided by the ongoing introduction of new products. The major advances have been in daily-wear and extended 30-day continuous-wear lenses, which are accounting for an increasing proportion of the market. However, these lenses dispense with the need for cleaning solutions, which is affecting the value of that particular sector. The retail sector of the market has been opened up by the entry of the leading supermarket chains and by the availability of contact lenses via the Internet. The supply of contact lenses and solutions is mainly concentrated in the hands of a few large US multinationals, including Johnson & Johnson, Bausch & Lomb, CooperVision, Advanced Medical Optics and Alcon Laboratories. Swiss-owned CIBA Vision is one of Europe's leading suppliers.
The laser eye treatment sector received a boost in March 2006 when the National Institute for Health and Clinical Excellence (NICE) issued guidance that laser eye surgery was safe enough and sufficiently effective to be carried out on appropriately selected patients. The new guidance was important because, for the first time, laser eye surgery was presented officially as a viable and safe alternative to spectacles and contact lenses. The industry is hoping that this guidance will help to allay the fears some potential customers have concerning laser eye treatment, demand for the treatment having suffered from some adverse publicity in 2003. The two market leaders in this sector are Ultralase and Optimax.
The retail environment remains highly competitive for opticians. Specsavers has continued to enhance its position as the UK's leading optician and other chains, such as Optical Express and Scrivens, have expanded their outlet numbers over the past 2 years. Boots has recently announced that it is to develop its franchise operation and Dollond & Aitchison has linked up with Sainsbury's for the provision of contact lens aftercare. The grocery multiples are expanding their presence in the market and Internet sales remain a feature. These trends all place ongoing pressure on the independents in the industry.
The need for optical goods is global, with nearly two-thirds of the world's population needing corrective lenses, although less than a quarter wear them. This percentage varies from one region to another. People in North America, Japan, Australia and Western Europe are generally well equipped, but a high proportion of the population in Eastern Europe, Latin America and Asia are in need of optical correction. Income and access to adequate sight testing and optician services account for much of the difference.
In original consumer research commissioned exclusively for this report, 66.3% of adults said that knowledgeable staff and a clean and tidy environment were important to them in choosing an optician. The survey also confirmed that, although people think that deals and lower prices are important, there is still a demand for smaller local opticians and recommendation is a significant factor in consumers' choice of practitioner. The research also found an increase in the perception that wearing glasses is much more acceptable nowadays. This is related to the greater fashion for wearing glasses.
The ophthalmic goods and services market is forecast to show steady growth over the next 5 years (to 2010), with the increasing need for eye testing and eyewear being offset by mounting competition and price sensitivity. It is likely that eye testing will become a greater focus of competition, being perceived as an entry point for sales, and adding value to this service will become part of the competitive edge.
Executive Summary
1. Introduction
BACKGROUND
DEFINITIONS
Opticians
Principal Sight Conditions
Spectacles
Contact Lenses
Laser Eye Surgery
2. Strategic Overview
INTRODUCTION
FACTORS AFFECTING THE MARKET
Opticians Act
General Optical Council
Laser Eye Surgery
Free Eye Tests in Scotland
Demographic Changes
Table 1: UK Population Projections by Age Group (million), 2005, 2010, 2015 and 2020
Sight Tests
Table 2: NHS Sight Tests in Great Britain by Category of Eligibility (% of NHS sight tests), 2004/2005
Figure 1: NHS Sight Tests in Great Britain by Category of Eligibility (% of NHS sight tests), 2004/2005
Table 3: Number of NHS and Private Sight Tests in Great Britain (million), 2000/2001-2004/2005
Figure 2: Number of NHS and Private Sight Tests in Great Britain (million), 2000/2001-2004/2005
Table 4: Vouchers Redeemed as a Proportion of NHS Sight Tests in Great Britain (000 and %), 2000/2001-2004/2005
Table 5: Vouchers Redeemed Against NHS Sight Tests in Great Britain by Age Group (%), 2000/2001-2004/2005
Table 6: Number and Percentage of NHS Sight Tests in Great Britain by Age (000 and %), 2000/2001-2004/2005
Table 7: Action Taken Following an Eye Test (%), 2002/2003 and 2004/2005
Table 8: Average Expenditure on a Pair of Spectacles — Purchased Privately/Purchased with NHS Voucher (£), 2001/2002-2004/2005
Table 9: NHS Sight Tests by Optometrists and Ophthalmic Medical Practitioners in Great Britain (000 and %), 2000/2001-2004/2005
Number of Practitioners and Premises
Table 10: Optometrists and Ophthalmic Medical Practitioners in Great Britain† (approximate number and %), 2000-2004
Table 11: Number of General Ophthalmic Services Premises in England and Wales, 2000-2004
MARKET DYNAMICS AND SEGMENTATION
Table 12: The Total UK Market for Optical Goods and Services by Sector by Value at Current Prices (£m at rsp), 2001-2005
Figure 3: The Total UK Market for Optical Goods and Services by Value at Current Prices (£m at rsp), 2001-2005
DISTRIBUTION
COMPETITIVE STRUCTURE
ADVERTISING
Table 13: Main Media Advertising Expenditure by Opticians and on Optical Goods by Sector (£000 and %), Year Ending March 2006
THE CONSUMER
MARKET FORECASTS
Table 14: The Forecast UK Market for Optical Goods and Services by Sector by Value at Current Prices (£m at rsp), 2006-2010
3. Spectacle Frames and Lenses
BACKGROUND
MARKET SIZE
Table 15: The UK Spectacles Sector by Value at Current Prices (£m at rsp), 2001-2005
Figure 4: The UK Spectacles Sector by Value at Current Prices (£m at rsp), 2001-2005
Table 16: The UK Spectacles Sector by Type of Lens by Volume (%), 2004 and 2005
CONSUMER TRENDS
MARKETING ACTIVITY
ADVERTISING
Table 17: Main Media Advertising Expenditure on Spectacle Frames and Lenses (£000 and %), Year Ending March 2006
DISTRIBUTION
Table 18: Industry Synopsis of Companies Engaged in the Manufacture of Spectacles and Unmounted Lenses in the UK (£000, % and £), 2005
4. Contact Lenses
BACKGROUND
Wear Time
Disposability
Reasons for Wearing Contact Lenses
MARKET SIZE
Contact Lenses
Table 19: Number of Contact Lens Wearers in the UK, 2001-2005
Table 20: The UK Contact Lenses Sector by Value at Current Prices (£m at rsp), 2001-2005
Figure 5: The UK Contact Lenses Sector by Value at Current Prices (£m at rsp), 2001-2005
Table 21: The UK Contact Lenses Sector by Type of Lens by Value (%), 2005
Contact Lens Solutions
Table 22: The UK Contact Lens Solutions Sector by Value at Current Prices (£m at rsp), 2001-2005
Figure 6: The UK Contact Lens Solutions Sector by Value at Current Prices (£m at rsp), 2001-2005
CONSUMER TRENDS
MARKETING ACTIVITY
ADVERTISING
Table 23: Main Media Advertising Expenditure on Selected Contact Lens Brands (£000 and %), Year Ending March 2006
DISTRIBUTION
5. Laser Eye Treatment
BACKGROUND
Benefits
Risks
Guidance from NICE
Image Problems
MARKET SIZE
Table 24: The UK Laser Eye Treatment Sector by Value at Current Prices (£m at rsp), 2001-2005
Figure 7: The UK Laser Eye Treatment Sector by Value at Current Prices (£m at rsp), 2001-2005
CONSUMER TRENDS
Table 25: Respondents Who Had Undergone LASIK (Laser) Eye Surgery or Who Were Planning to Have LASIK (Laser) Eye Surgery (% of respondents), 2005
MARKETING ACTIVITY
ADVERTISING
Table 26: Main Media Advertising Expenditure on Laser Vision Correction (£000 and %), Year Ending March 2006
DISTRIBUTION
6. Opticians and Retailers
BACKGROUND
MARKET SIZE
Table 27: Number of Ophthalmic Opticians (Optometrists) and Dispensing Opticians in the UK, 2001-2004
Income from General Ophthalmic Services and Private Sight Tests
Table 28: The UK Ophthalmic Services Sector by Subsector by Value at Current Prices (£m), Years Ending March 2001-2005
Figure 8: The UK Ophthalmic Services Sector by Value at Current Prices (£m), Years Ending March 2001-2005
Number of Opticians' Premises
Table 29: Number of Opticians' Premises in Great Britain, 2001-2005
Table 30: Number of VAT-Based Enterprises Engaged as Dispensing Opticians, 2001-2005
Table 31: UK Multiple Opticians by Number of Outlets (number of branches and %), 2003 and 2005
CONSUMER TRENDS
MARKETING ACTIVITY
ADVERTISING
Table 32: Main Media Advertising Expenditure by Opticians (£000 and %), Year Ending March 2006
DISTRIBUTION
7. An International Perspective
OVERVIEW
Penetration of Corrective Eyewear
Table 33: Percentage of Selected Global Regions' Populations with Corrective Eyewear, 2005
Figure 9: Percentage of Selected Global Regions' Populations with Corrective Eyewear, 2005
Table 34: The Worldwide Market for Corrective Lenses by Type of Lens by Volume (%), 2005
Figure 10: The Worldwide Market for Corrective Lenses by Type of Lens by Volume (%), 2005
Spectacles
Contact Lenses
Laser Eye Surgery
KEY MARKETS
The US
Germany
France
Italy
THE ROLE OF OPTOMETRISTS — INTERNATIONAL COMPARISONS
The US
Europe
France
Italy
Spain
Germany
8. PEST Analysis
POLITICAL FACTORS
ECONOMIC FACTORS
SOCIAL FACTORS
TECHNOLOGICAL FACTORS
9. Consumer Dynamics
OVERVIEW
Table 35: Summary of Attitudes Towards Opticians and Eyecare (% of respondents), 2000 and 2006
Analysis of Penetration Levels
SMALLER, LOCAL OPTICIANS VERSUS LARGE CHAINS, AND INFLUENCE OF PERSONAL RECOMMENDATIONS
"I Use or Would Prefer to Use Smaller, Local Opticians for My Eyecare Needs"
"I Use or Would Prefer to Use a Large Optician Chain Such as Boots or Vision Express for Eye Tests or Buying Contact Lenses or Glasses"
"When I Choose My Optician I Rely Mostly on Personal Recommendation"
Table 36: Smaller, Local Opticians versus Large Chains, and Influence of Personal Recommendations (% of respondents), 2006
REQUIREMENTS FROM OPTICIANS
"I Choose My Opticians for Their Knowledgeable Staff and a Tidy, Hygienic Environment"
"Special Offers That Give Value for Money, Like a Second Pair of Contact Lenses or Glasses Free, Are Important to Me When I Choose an Optician"
"Price is the Most Important Thing to Me When Choosing an Optician"
"Same-Day Service or Overnight Service is Important to Me"
Table 37: Requirements from Opticians — Staff Knowledge and Hygienic Environment, Special Offers, Low Price and Same-Day or Overnight Service (% of respondents), 2006
ATTITUDES TOWARDS WEARING GLASSES
"I Feel That Wearing Glasses is Much More Acceptable Nowadays, as They Have Become More Fashionable"
"I Wear Glasses Because They Suit My Needs Best"
"I Am Prepared to Pay More for Designer Frames"
Table 38: Attitudes Towards Wearing Glasses (% of respondents), 2006
ATTITUDES TOWARDS EYESIGHT AND EYESIGHT TESTS
"I Am a Regular PC User and Am Concerned About the Possible Effects on My Eyesight in the Short or Long Term"
"The Eye Test Fee Puts Me Off Having My Eyes Tested as Regularly As I Should"
"I Sometimes Suffer From Headaches or Eyestrain, But Do Not Have My Eyes Tested Regularly"
Table 39: Concerns About the Effects on Eyesight of Regularly Using PCs, Being Dissuaded by the Cost of Eye Tests and Not Having Eye Tests Despite Having Eyestrain (% of respondents), 2006
ATTITUDES TOWARDS CONTACT LENSES
"I Wear Contact Lenses Rather Than Glasses Because They Are More Convenient and Less Obtrusive"
"I Am Put Off Wearing Contact Lenses by Publicity Surrounding the Risk of Eye Infection if Cleaning and Wearing Regimes are Not Followed Carefully"
Table 40: Attitudes and Concerns Relating to Wearing Contact Lenses (% of respondents), 2006
10. Company Profiles
SPECTACLES
Carl Zeiss Vision UK Ltd
Corporate Strategy
Profitability
Table 41: Financial Results for Carl Zeiss Vision UK Ltd (£000), Years Ending 31st March 2003-2005
Recent Developments
Essilor Ltd
Corporate Strategy
Profitability
Table 42: Financial Results for Essilor Ltd (£000), Years Ending 31st December 2003-2005
Recent Developments
The Norville Group Ltd
Corporate Strategy
Profitability
Table 43: Financial Results for The Norville Group Ltd (£000), Years Ending 31st December 2002-2004
Recent Developments
Rodenstock (UK) Ltd
Corporate Strategy
Profitability
Table 44: Financial Results for Rodenstock (UK) Ltd (£000), Years Ending 31st December 2002-2004
Recent Developments
Other Companies
Luxottica
Safilo
Silhouette
CONTACT LENSES
Alcon Laboratories (UK) Ltd
Corporate Strategy
Profitability
Table 45: Financial Results for Alcon Laboratories (UK) Ltd (£000), Years Ending 31st December 2002-2004
Recent Developments
Bausch & Lomb UK Ltd
Corporate Strategy
Profitability
Table 46: Financial Results for Bausch & Lomb UK Ltd (£000), Years Ending 31st December 2002-2004
Recent Developments
CIBA Vision (UK) Ltd
Corporate Strategy
Profitability
Table 47: Financial Results for CIBA Vision (UK) Ltd (£000), Years Ending 31st December 2003-2005
Recent Developments
CooperVision Ltd
Corporate Strategy
Profitability
Table 48: Financial Results for CooperVision Ltd (£000), Years Ending 31st October 2001-2003
Recent Developments
Johnson & Johnson Vision Care Inc
Corporate Strategy
Profitability
Recent Developments
Other Companies
Advanced Medical Optics
daysoft
Sauflon
UltraVision CLPL
LASER EYE TREATMENT
Optimax Ltd
Corporate Strategy
Profitability
Recent Developments
Ultralase Ltd
Corporate Strategy
Profitability
Table 49: Financial Results for Ultralase Ltd (£000), Years Ending 31st July 2003 and 2004, and 74 Weeks Ending 31st December 2005
Recent Developments
Other Companies
Accuvision Laser Eye Clinics
Advanced Laser Eye Clinic
Optical Express Laser Clinics
OPTICIANS
Boots Opticians Ltd
Corporate Strategy
Profitability
Table 50: Financial Results for Boots Opticians Ltd (£000), Years Ending 31st March 2003-2005
Recent Developments
Dollond & Aitchison Ltd
Corporate Strategy
Profitability
Table 51: Financial Results for Dollond & Aitchison Ltd (£000), Years Ending 28th December 2002 and 27th December 2003, and 53 Weeks Ending 1st January 2005
Recent Developments
Specsavers Optical Superstores Ltd
Corporate Strategy
Profitability
Table 52: Financial Results for Specsavers Optical Superstores Ltd (£000), Years Ending 28th February 2003, 29th February 2004 and 28th February 2005
Recent Developments
Other Companies
ASDA
GC Bateman Group
Sainsbury's
Scrivens
Tesco
Vision Express
11. The Future
INTRODUCTION
FORECASTS
Table 53: The Forecast UK Market for Optical Goods and Services by Sector by Value at Current Prices (£m at rsp), 2006-2010
Figure 11: The Forecast UK Market for Optical Goods and Services by Value at Current Prices (£m at rsp), 2006-2010
12. Consumer Confidence
METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Declines Again
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006
Signs That the Decline Could be Bottoming Out
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), May 2005, August 2005, November 2005, February 2006 and May 2006
THE WILLINGNESS TO SPEND FROM SAVINGS
Sharp Decline in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006
Table D: The Proportion of Adults Without Any Savings (%), May 2005, August 2005, November 2005, February 2006 and May 2006
Borrowing Grows in Relative Importance
Table E: The Average Amounts Adults are Confident Spending to Purchase Expensive Items (£ and %), May 2005, August 2005, November 2005, February 2006 and May 2006
13. Further Sources
Associations
General Sources
Government Sources
Other Sources
Bisnode Sources
- Accuvision Laser Eye Clinics
- Advanced Laser Eye Clinic
- Advanced Medical Optics
- Alcon Laboratories (UK) Ltd
- ASDA
- Bausch & Lomb UK Ltd
- Boots Opticians Ltd
- Carl Zeiss Vision UK Ltd
- CIBA Vision (UK) Ltd
- CooperVision Ltd
- daysoft
- Dollond & Aitchison Ltd
- Essilor Ltd
- GC Bateman Group
- Johnson & Johnson Vision Care Inc
- Luxottica
- Optical Express Laser Clinics
- Optimax Ltd
- Rodenstock (UK) Ltd
- Safilo
- Sainsbury's
- Sauflon
- Scrivens
- Silhouette
- Specsavers Optical Superstores Ltd
- Tesco
- The Norville Group Ltd
- Ultralase Ltd
- UltraVision CLPL
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