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| MAPS : Opticians and Optical Goods: April 2004 |
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This report covers: opticians, optical goods, principal sight conditions, spectacles, contact lenses, laser eye surgery, cosmetic lenses, plano, NHS, eye tests, vouchers, free sight tests NHS vouchers, practitioners, spectacle, frames, and lenses, ready readers, one-day disposable lenses, disposable lenses, rigid gas permeable lenses, bifocal lenses, Lasik, Lasek, Wavefront, laser treatment clinics, opticians, retailers, US, Asia, Europe,
companies covered include: Essilor, UK, Norville group, Rodenstock, Sola Optical, Luxottica, Safilo, Silhouette, Alcon Laboratories, Bausch and Lomb, Ciba Vision, CooperVision, Johnson and Johnson, Vision Care, Advanced Medical Optics, CLPL, Ocular Sciences, Provis, Optimax, Ultralase, Laser Vision, Dollond & Aitchison, Specsavers Optical Superstores, ASDA, Scrivens, Tesco, Vision Express,
EXECUTIVE SUMMARY
| Executive Summary |
| This Key Note Market Assessment report provides an analysis of the opticians and optical goods market, which includes sight tests, spectacles, contact lenses and solutions and laser eye treatment. It updates a previous Opticians & Optical Goods Market Assessment report published in 2000. |
| Despite the emerging issues of cosmetic contact lenses and laser eye treatment, there has been no significant change in legislation in the market since the decision to offer free NHS sight tests to those aged over 60, which was introduced in April 1999. This has had some effect in increasing the number of eye tests to 16.9 million in 2002/2003, at a value of £304m. In the UK, the population is ageing significantly, meaning that by 2015 there will be around 5.7 million more people over the age of 45 than there were in 1995, an age group that includes many potential spectacle wearers among those suffering from presbyopia, or longsightedness, when focusing for reading diminishes in middle age. |
| The spectacles market has seen some growth in value as a result of an increase in sight tests, as well as promotions encouraging people to have more than one pair of spectacles. However, despite this increase and an element of trading up to designer spectacles, growth in value sales has been held back by `two for one' promotions in addition to other price discounts. Value sales have increased by 13.3% over the past 5 years (1999 to 2003). With the exception of Sola Optical, which is based in the US, the major players in the market are European companies, for example, Essilor, Luxottica, the UK-based Norville, Rodenstock, Safilo and Silhouette. |
| The contact lens market has seen considerable product development over the past 5 years and as a result, contact lenses are becoming a more popular alternative to spectacles. Value sales increased by 6.7% between 1999 and 2003. The major developments have been in daily wear and extended 30-day continuous wear lenses, which do away with the need for cleaning solutions. As a direct result of the increasing popularity of these, the solutions market is in decline with its value in 2003 falling to only 89.1% of its 1999 value. |
| Contact lens and solutions supply is concentrated in the hands of a few large multinationals, mainly of US origin, with the exception of Ciba Vision which is Swiss-owned. The major players are Johnson & Johnson, Bausch & Lomb, Cooper Vision, Advanced Medical Optics (AMO — formerly Allergan), Ocular Sciences and Alcon Laboratories. Ocular Sciences is a relatively new entrant to the European market following its purchase of Essilor's contact lens business in 2001. |
| Laser eye treatment is a new viable market segment worth around £140m in 2003. Treatment is expensive, at £2,000 for both eyes, but it has the advantage for the consumer of being a one-off payment with no need for further correction. The leading companies are Ultralase, Optimax, Laser Vision and Boots. However, the market has suffered a setback following bad publicity over health risks associated with the treatment, causing a significant downturn in the number of treatments, with accompanying job losses and closures. |
| The retail environment has become highly competitive for opticians. Specsavers has grown to become the country's largest optician with a 24% retail share in 2003. Boots Opticians is second with only 10% of the market, by comparison. Dollond & Aitchison and Vision Express are the next largest high-street opticians. Independents have lost share to the multiples as they have struggled to compete. Meanwhile, grocery multiples, e.g. ASDA and Tesco, have increased their share of the market as they open up a growing number of opticians in their stores. |
| The international market for optical goods is huge and there is most potential for growth in the developing world, where penetration of optical goods is well below that in the West. As part of the global market there are likely to be further incursions into the UK market, particularly by opticians chains, some of which have already been the subject of acquisitions by overseas companies. |
| In original consumer research commissioned exclusively by Key Note for this report from BMRB Access, 43% of adults said that knowledgeable staff and a clean and tidy environment was important to them in choosing an optician. The survey also confirmed that, while people think deals and lower prices are important, there is still a need for smaller local opticians and recommendation is significant. Further findings revealed some opportunities for expanding the market and penetration of contact lenses among adults. |
| The future prospects for this market are mixed. While sight tests are expected to increase in volume and value over the next 5 years, due in part to the ageing population, the value of sales of spectacles is not expected to show much improvement. Spectacles will suffer from further price erosion as a byproduct of the competition between opticians. While contact lenses will be affected by a reduction in the number of potential wearers, either because of shifts in the population or an increase in laser eye treatment, Key Note, nevertheless, expects moderate growth. The solutions market will further fade as advances in contact lenses make them redundant. |
| Laser eye treatment is the brightest area for growth in the entire market. It is expected to make a full recovery after bad publicity in 2003 and sales values are forecast to more than double by 2008. |
TABLE OF CONTENTS
| Executive Summary |
| 1. Introduction |
| DEFINITIONs |
| Opticians |
| Principal Sight Conditions |
| Spectacles |
| Contact Lenses |
| Laser Eye Surgery |
| 2. Strategic Overview |
| Introduction |
| Factors Affecting the MArket |
| Regulation |
| General Optical Council |
| Cosmetic (Plano) Lenses |
| NHS Eye Tests and NHS Vouchers |
| Table 1: Entitlement to Free Sight Tests and NHS Vouchers, 2004 |
| The Healthcare Commission |
| Demographic Changes |
| Table 2: UK Population Change by Age Group (million), 1995, 2005 and 2015 |
| Figure 1: UK Population Change by Age Group (million), 1995, 2005 and 2015 |
| Practitioners |
| Table 3: UK-Registered Optometrists and Ophthalmic Medical Practitioners (number and %), 1998-2002 |
| Sight Tests |
| Table 4: UK Sight Tests by Volume and Value (million tests and £m), 1998/1999-2002/2003 |
| Figure 2: UK Sight Tests by Volume and Value (million tests and £m), 1998/1999-2002/2003 |
| Table 5: Number of NHS Sight Tests by Age (000), 1998/1999-2002/2003 |
| Table 6: Action Taken Following Eye Test (%), Year Ending March 2003 |
| Table 7: Sight Tests by Ophthalmic Medical Practitioners and Optometrists in Practice (000 and %), 1998/1999-2002/2003 |
| Vouchers |
| Table 8: Vouchers Redeemed as a Proportion of NHS Sight Tests (000 and %), 1998/1999-2002/2003 |
| Table 9: Vouchers Redeemed Against NHS Sight Tests by Age Group (%), 1998/1999-2002/2003 |
| Market Dynamics and Segmentation |
| Table 10: Retail Sales of Optical Goods and Services by Value (£m at rsp), 1999-2003 |
| Figure 3: Retail Sales of Optical Goods and Services by Value (%), 2003 |
| Distribution |
| Competitive Structure |
| Advertising |
| The Consumer |
| Market Forecasts 2004 to 2008 |
| Table 11: The Forecast UK Opticians and Optical Goods Market by Value (£m at rsp), 2004-2008 |
| 3. Spectacle Frames and Lenses |
| Background |
| Spectacle Lenses |
| Spectacle Frames |
| The Supply Chain |
| Market Size |
| Table 12: The UK Spectacles Market by Value (£m at rsp), 1999-2003 |
| Figure 4: The UK Spectacles Market by Value (£m at rsp), 1999-2003 |
| Table 13: The UK Market for Spectacles by Type of Lens by Value (%), 2003 |
| Ready Readers |
| Consumer Trends |
| Consumer Spending on Spectacles |
| Table 14: Average Expenditure on a Pair of Spectacles (£), 2001/2002 and 2002/2003 |
| Supplier Issues |
| Market Forecasts 2004 To 2008 |
| Table 15: The Forecast UK Spectacles Market by Value (£m at rsp), 2004-2008 |
| Figure 5: The Forecast UK Spectacles Market by Value (£m at rsp), 2004-2008 |
| 4. Contact Lenses |
| Background |
| Contact Lenses |
| One-Day Disposable Lenses |
| Disposable Lenses |
| Extended Wear Disposable Lenses |
| Rigid Gas Permeable Lenses |
| Bifocal Lenses |
| Cosmetic Contact Lenses |
| Solutions |
| Suppliers |
| Market Size |
| Contact Lenses |
| Table 16: The UK Contact Lens Market by Value (£m at rsp), 1999-2003 |
| Figure 6: The UK Contact Lens Market by Value (£m at rsp), 1999-2003 |
| Table 17: The UK Market for Contact Lens by Type of Lens by Value (%), 2002 |
| Contact Lens Solutions |
| Table 18: The UK Contact Lens Solutions Market by Value (£m at rsp), 1999-2003 |
| Figure 7: The UK Contact Lens Solutions Market for by Value (£m at rsp), 1999-2003 |
| Consumer Trends |
| Cosmetic Lenses |
| The Impact of Laser Treatment |
| Suppliers |
| Market Forecasts 2004 to 2008 |
| Contact Lenses |
| Table 19: The Forecast UK Contact Lens Market by Value (£m at rsp), 2004-2008 |
| Figure 8: The Forecast UK Contact Lens Market by Value (£m at rsp), 2004-2008 |
| Contact Lens Solutions |
| Table 20: The Forecast UK Contact Lens Solutions Market by Value (£m at rsp), 2004-2008 |
| Figure 9: The Forecast UK Contact Lens Solutions Market by Value (£m at rsp), 2004-2008 |
| 5. Laser Eye Treatment |
| Background |
| Lasik |
| Lasek |
| Wavefront |
| Market Size |
| Table 21: The UK Laser Eye Treatment Market by Value (£m at rsp), 1999-2003 |
| Figure 10: The UK Laser Eye Treatment Market by Value (£m at rsp), 1999-2003 |
| Laser Treatment Clinics |
| Suppliers |
| Market Forecasts 2004 to 2008 |
| Table 22: The Forecast UK Laser Eye Treatment Market by Value (£m at rsp), 2004-2008 |
| Figure 11: The Forecast UK Laser Eye Treatment Market by Value (£m at rsp), 2004-2008 |
| 6. Opticians and Retailers |
| Background |
| Table 23: Number of Opticians Premises in England and Wales, 1998-2002 |
| Figure 12: Number of Opticians Premises in England and Wales, 1998-2002 |
| Table 24: Distribution of Optical Goods in the UK by Type of Retailer by Value (%), 1999 and 2003 |
| Table 25: UK Retail Share by Optical Goods Retailer (%), 1999 and 2003 |
| Table 26: UK Multiple Opticians by Number of Outlets, 1999 and 2003 |
| Market Forecasts 2004 to 2008 |
| Table 27: The Forecast UK Sight Tests Market by Value (£m at rsp), 2004-2008 |
| Figure 13: The Forecast UK Sight Tests Market by Value (£m at rsp), 2004-2008 |
| 7. Advertising and Promotion |
| Introduction |
| Spectacles and Contact Lenses |
| Table 28: Main Media Advertising Expenditure by Suppliers of Spectacle Frames and Lenses and Contact Lenses (£000), Year Ending December 2003 |
| Laser Eye Treatment |
| Table 29: Main Media Advertising Expenditure by Laser Eye Correction Clinics (£000), Year Ending December 2003 |
| Opticians |
| Table 30: Main Media Advertising Expenditure by Opticians (£000), Year Ending December 2003 |
| 8. An International Perspective |
| Overview |
| Table 31: Percentage of the Population That Wear Spectacles or Contact Lenses by Region (%), 2003 |
| The US |
| Europe |
| Asia |
| 9. PEST Analysis |
| POLITICAL Factors |
| Economic Factors |
| Social Factors |
| Technological Factors |
| 10. Consumer Dynamics |
| OverAll Findings |
| Table 32: Summary of Attitudes Towards Opticians and Eye Care (% of respondents), 2000 and 2004 |
| Analysis of Results |
| Knowledgeable Staff And A Tidy Hygienic Environment Are Important To Me When Choosing An Optician |
| Price Is Important To Me When Choosing An Optician |
| Table 33: Attitudes Towards Opticians, Staff and Environment and Price (% of respondents), 2004 |
| I Feel It Is More Acceptable To Wear Glasses Nowadays As They Have Become More Fashionable |
| I Wear Glasses Because They Suit My Needs And The Style Of Frames These Days Are More Fashionable Than In The Past |
| Table 34: Attitudes Towards Wearing Glasses (% of respondents), 2004 |
| I Use Or Would Prefer To Use Smaller Local Opticians For My Eye Care Needs |
| When Choosing An Optician I Rely Mostly On Personal Recommendation |
| Table 35: Preference For Smaller Local Opticians and Choosing Opticians by Personal Recommendation (% of respondents), 2004 |
| 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 |
| Same Day Service Or Overnight Service Is Important To Me |
| Table 36: Preference for Large Opticians and Importance of Same Day or Overnight Service (% of respondents), 2004 |
| Special Offers Like A Second Pair Of Contact Lenses Or Glasses Free Are Important To Me When I Choose An Optician |
| I Am Prepared To Pay More For Designer Frames |
| Table 37: Attitudes Towards Special Offers and Designer Frames (% of respondents), 2004 |
| I Am a Regular PC User And Am Concerned About The Possible Effects On My Eyesight In The Short Or Long Term |
| I Sometimes Suffer From Headaches Or Eyestrain But Do Not Have My Eyes Tested Regularly |
| Table 38: Concern About Effects on Eyesight of Using PCs Regularly and Prevalence of Headaches or Eyestrain (% of respondents), 2004 |
| 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 39: Attitudes Towards Wearing Contact Lenses (% of respondents), 2004 |
| The Eye Test Fee Puts Me Off Having My Eyes Tested As Regularly As I Should |
| Table 40: Influence of Eye Test Fee on Regularity of Taking Eye Tests (% of respondents), 2004 |
| 11. Company Profiles |
| SPECTACLES |
| Essilor UK Ltd |
| Corporate Strategy |
| Profitability |
| Table 41: Financial Results for Essilor UK Ltd (£m), Years Ending 31st December 2000-2002 |
| Recent and Future Developments |
| Norville Group Ltd |
| Corporate Strategy |
| Profitability |
| Table 42: Financial Results for Norville Group Ltd (£000), Years Ending 31st December 2000-2002 |
| Recent and Future Developments |
| Rodenstock (UK) Ltd |
| Corporate Strategy |
| Profitability |
| Table 43: Financial Results for Rodenstock (UK) Ltd (£000), Years Ending 31st December 2000-2002 |
| Recent and Future Developments |
| Sola Optical (UK) Ltd |
| Corporate Strategy |
| Profitability |
| Table 44: Financial Results for Sola Optical (UK) Ltd (£000), Years Ending 31st March 2000-2002 |
| Recent and Future Developments |
| Other Suppliers |
| Luxottica |
| Safilo |
| Silhouette |
| CONTACT LENSes |
| Alcon Laboratories (UK) Ltd |
| Corporate Strategy |
| Profitability |
| Table 45: Financial Results for Alcon Laboratories (UK) Ltd (£m), Years Ending 31st December 2000-2002 |
| Recent and Future Developments |
| Bausch & Lomb UK Ltd |
| Corporate Strategy |
| Profitability |
| Table 46: Financial Results for Bausch & Lomb UK Ltd (£000), Years Ending 31st December 2000-2002 |
| Recent and Future Developments |
| Ciba Vision (UK) Ltd |
| Corporate Strategy |
| Profitability |
| Table 47: Financial Results for Ciba Vision (UK) Ltd (£000), Years Ending 31st December 2001-2003 |
| Recent and Future Developments |
| CooperVision Ltd |
| Corporate Strategy |
| Profitability |
| Table 48: Financial Results for CooperVision Ltd (£000), Years Ending 31st October 2000-2002 |
| Recent and Future Developments |
| Johnson & Johnson Vision Care Inc. |
| Corporate Strategy |
| Profitability |
| Recent and Future Developments |
| Other Suppliers |
| Advanced Medical Optics |
| CLPL |
| Ocular Sciences |
| Provis |
| LASER EYE TREATMENT |
| Optimax Ltd |
| Corporate Strategy |
| Profitability |
| Recent and Future Developments |
| Ultralase Ltd |
| Corporate Strategy |
| Profitability |
| Table 49: Financial Results for Ultralase Ltd (£000), Years Ending 31st July 2000-2002 |
| Recent and Future Developments |
| Other Companies |
| Laser Vision |
| OPTICIANS |
| Boots Opticians Ltd |
| Corporate Strategy |
| Profitability |
| Table 50: Financial Results for Boots Opticians Ltd (£000), Years Ending 31st March 2001-2003 |
| Recent and Future Developments |
| Dollond & Aitchison Ltd |
| Corporate Strategy |
| Profitability |
| Table 51: Financial Results for Dollond & Aitchison Ltd (£000), Years Ending 30th December 2000, 29th December 2001 and 30th December 2002 |
| Recent and Future Developments |
| Specsavers Optical Superstores Ltd |
| Corporate Strategy |
| Profitability |
| Table 52: Financial Results for Specsavers Optical Superstores Ltd (£m), Years Ending 28th February 2001-2003 |
| Recent and Future Developments |
| Other Companies |
| ASDA |
| Optical Express |
| Scrivens |
| Tesco |
| Vision Express |
| 12. The Future |
| competitive retail environment to Continue |
| Volume of Sight tests to Grow |
| Table 53: The Forecast UK Opticians and Optical Goods Market by Value (£m at rsp), 2004-2008 |
| Figure 14: The Forecast UK Opticians and Optical Goods Market by Value (£m at rsp), 2004-2008 |
| Further Sources |
| Associations |
| Publications |
| General Sources |
| Government Sources |
| Other Sources |
| Bonnier Information Sources |
Text © 2004 Key Note
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Last updated by Amanda Porteous September
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