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Optical Goods Retailing - UK - February 2017

“Concentration of the retail sector has continued and major suppliers have moved into online selling. The largest retailer, Specsavers, has continued to build market share, thanks to the expansion of the chain, as well as the addition of related services such as domiciliary and hearing services. In its latest move, Specsavers is determined to develop MECS (Minor Eyecare Conditions Schemes), adding to its portfolio of services. Attention-grabbing deals remain the cornerstone of promotional strategy, but we are seeing more brand building by the chains in order to reduce the focus on discounting. New opticians inside John Lewis (in conjunction with Luxottica) and the steady growth of optical chains at Asda and Tesco will intensify competition even further. Plus, online selling is continuing to concentrate into the hands of major suppliers and multiple groups; most notably many of the pioneers have been bought by Essilor. Meanwhile Superdrug has entered the online market for prescription spectacles. Inevitably the losers will be independents, which continue to see market share being steadily chipped away.”
– Jane Westgarth, Senior Market Analyst

This Report answers the following key questions:

  • What impact is online selling having on the market for optical goods? 
  • Is laser surgery having an impact on the market for spectacles and contact lenses? 
  • Will spectacle businesses get into the emerging market for wearable technology?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
        • Excluded
        • Executive Summary

            • Consumers spend £3,067 million on optical goods and eye examinations
              • Figure 1: Consumer spending on optical goods and services, 2011-21
            • 16.5% growth forecast for sunglasses between 2016 and 2021
              • Figure 2: Consumer spending on fashion sunglasses, 2011-21
            • Spectacles are 61% of the market by value
              • Figure 3: Consumer spending on optical goods and services, by category, 2016 (est)
            • Ageing population expands audience for prescription eyewear
              • Companies, brands and innovation
                • 66% of the market captured by the top three opticians
                  • Figure 4: Distribution of optical goods and services, by retailer, 2014 and 2016 (est)
                • Highly concentrated supply chain
                  • New Danish entrant with personality
                    • Superdrug sells optical goods online
                      • Emerging world of wearable technology
                        • Specsavers brand stands out
                          • Figure 5: Attitudes towards and usage of selected brands, January 2017
                        • The consumer
                          • 57% of adults had an eye examination in the last year
                            • 60% of eye tests were paid for by NHS
                              • Figure 6: About the last eye examination, October 2016
                            • 22% switched opticians for their last eye test
                              • Figure 7: About the last eye examination, October 2016
                            • Special deals and better staff encouraged switch of opticians
                              • Figure 8: Reasons for switching retail opticians, October 2016
                            • 9% of all have ever had laser eye surgery
                              • 73% of adults use prescription eyewear
                                • Figure 9: Users of prescription eyewear, October 2016
                              • 26% bought fashion sunglasses in the last year
                                • Figure 10: Purchasers of fashion eyewear, October 2016
                              • ABs and 16-34s are core customers for fashion sunglasses
                                • Prescription glasses dominate the market
                                  • Figure 11: Purchases of prescription eyewear, October 2016
                                • Specsavers is the most used optician
                                  • Figure 12: Retailers used for last prescription eyewear, 2014-16
                                • 9% are interested in ‘smart’ glasses
                                  • Figure 13: Interest in lens innovation, October 2016
                                • People value professional fitting
                                  • Figure 14: Attitudes regarding opticians, October 2016
                                • Target groups
                                  • Figure 15: Target groups for opticians, October 2016
                                • What we think
                                • Issues and Insights

                                  • What impact is online selling having on the market for optical goods?
                                    • The facts
                                      • The implications
                                        • Is laser surgery having an impact on the market for spectacles and contact lenses?
                                          • The facts
                                            • The implications
                                              • Will spectacle businesses get into the emerging market for wearable technology?
                                                • The facts
                                                  • The implications
                                                  • The Market – What You Need to Know

                                                    • Consumers spend £3,067 million on optical goods and eyecare
                                                      • Population growth will increase demand
                                                        • Market for sunglasses shows steady growth
                                                          • Innovation has helped to add value
                                                            • Older customers will create more demand for services
                                                              • More 25-34s boost demand for contact lenses
                                                                • Improved consumer confidence
                                                                  • Market share gains
                                                                  • Market Size and Forecast

                                                                    • 16.6% growth forecast between 2016 and 2021
                                                                      • Figure 16: Consumer spending on optical goods and services, 2011-21
                                                                    • Market growth of around 3% per year expected
                                                                      • Figure 17: Consumer spending on optical goods and services, 2011-21
                                                                    • 16.5% growth forecast for sunglasses between 2016 and 2021
                                                                      • Figure 18: Consumer spending on fashion sunglasses, 2011-21
                                                                    • 11% market growth without inflation
                                                                      • Figure 19: Consumer spending on fashion sunglasses, 2011-21
                                                                    • Forecast methodology
                                                                      • The impact of Brexit
                                                                        • Figure 20: Alternative market scenarios for the post-Brexit optical goods and services market, at current prices, 2016-21
                                                                        • Figure 21: Detailed post-Brexit scenarios for the optical goods and services, at current prices, 2016-21
                                                                      • Little change for shoppers
                                                                        • Consumers are already shopping savvily
                                                                        • Market Segmentation

                                                                          • Spectacles are 61% of the market by value
                                                                            • Figure 22: Consumer spending on optical goods and services, by category, 2016 (est)
                                                                          • Optical goods market by category
                                                                            • Figure 23: Consumer spending on optical goods and services, by category, 2011-21
                                                                          • Sales of progressive lenses now larger than bifocals
                                                                            • Figure 24: Spectacle lens purchases, by type, (numbers) 2016 (est)
                                                                          • Contact lens market up by 18.8% between 2011 and 2016
                                                                            • Multifocal contact lenses now 26% of new fits
                                                                              • Toric lenses have broadened the market
                                                                                • Rise of daily-wear lenses means lower demand for solutions
                                                                                  • 25% of contact lens wearers are part-time
                                                                                    • Market dominated by soft contact lenses
                                                                                      • Eye drops growing strongly from a small base
                                                                                        • Eye examination numbers growing gradually
                                                                                          • Figure 25: NHS sight tests, England and Wales, 2015 and 2016
                                                                                          • Figure 26: Year-on-year change in NHS sight test numbers, England and Wales, 2011-16
                                                                                      • Channels to Market

                                                                                        • 66% of the market captured by the top three opticians
                                                                                          • Figure 27: Distribution of optical goods and services, by retailer, 2014 and 2016 (est)
                                                                                        • Specsavers grows market share to 38.7%
                                                                                          • Boots struggles in 2016, slipping to 14.6% market share
                                                                                            • Vision Express adds 1% to market share between 2014 and 2016
                                                                                              • Optical Express shifted its efforts to laser surgery
                                                                                                • Supermarkets gradually expanding opticians’ presence
                                                                                                  • Ceiling for growth for supermarkets
                                                                                                    • Sunglass concessions and in-store opticians open in department stores
                                                                                                      • Online sellers
                                                                                                        • Figure 28: Distribution of optical goods and services, by retailer, 2012-16 (est)
                                                                                                    • Market Drivers

                                                                                                      • Ageing population expands audience for prescription eyewear
                                                                                                        • Take children seriously
                                                                                                          • Figure 29: Trends in the age structure of the UK population, 2016-21
                                                                                                        • Consumers showing strong levels of confidence
                                                                                                          • Figure 30: Trends in how respondents would describe their financial situation, September 2015-December 2016
                                                                                                        • High exposure to ‘blue light’ from personal technology
                                                                                                          • Figure 31: Personal ownership of consumer technology products, September 2016
                                                                                                        • Sunnier days boost sales of sunglasses
                                                                                                          • Figure 32: Annual sunshine hours, UK, by country, 2015 and decade average to 2015
                                                                                                      • Industry Changes

                                                                                                        • Ruling warns Boots on overclaiming benefits of filtering out Blue Light
                                                                                                          • Opticians could build Enhanced Optical Services (or MECS)
                                                                                                            • Community-based eye health is popular with patients
                                                                                                              • Employers’ requirements for VDU users
                                                                                                              • Key Retailers – What You Need to Know

                                                                                                                • Acquisition is an attractive strategy
                                                                                                                  • Clear differentiation for the big chains
                                                                                                                    • Joint venture partnerships
                                                                                                                      • Hakim growing its presence
                                                                                                                        • Luxottica Retail more than doubled sales between 2013 and 2016
                                                                                                                          • Growth for supermarket opticians restricted by space available
                                                                                                                            • Online sellers
                                                                                                                              • Specsavers and Boots ahead on trust
                                                                                                                              • Competitive Strategies

                                                                                                                                • Sales growth of optical chains
                                                                                                                                  • Luxottica is the fastest growing
                                                                                                                                    • Specsavers expands its reach
                                                                                                                                      • Vision Express and Scrivens grown through acquisition
                                                                                                                                        • Figure 33: Turnover (excluding vat), selected optical goods retailers, 2012-15
                                                                                                                                      • Concentration of the opticians sector
                                                                                                                                        • Figure 34: Opticians, store numbers, 2013-16
                                                                                                                                      • Creating differentiation
                                                                                                                                        • Figure 35: Market positioning strategies, major opticians, 2017
                                                                                                                                      • Business models
                                                                                                                                        • Franchises, joint venture and non-core products
                                                                                                                                          • Hakim Group growing rapidly
                                                                                                                                            • Alternative places to buy optical goods
                                                                                                                                              • Online selling
                                                                                                                                                • Essilor expands in online retailing and merges with Luxottica
                                                                                                                                                  • The march of the supermarkets
                                                                                                                                                    • 4,500 independents
                                                                                                                                                    • Key Suppliers to Opticians

                                                                                                                                                      • Essilor developing online businesses via acquisition
                                                                                                                                                        • Essilor merges with Luxottica
                                                                                                                                                          • Specialist spectacle lens suppliers
                                                                                                                                                            • 3D printing could be a disruptive influence
                                                                                                                                                              • Sourcing shifting from China
                                                                                                                                                                • Smart glasses in development
                                                                                                                                                                  • Suppliers of contact lenses and contact lens solutions
                                                                                                                                                                    • Sunglasses market dominated by high volumes and low prices
                                                                                                                                                                    • Launch Activity and Innovation

                                                                                                                                                                      • CrossEyes plans franchise expansion in the UK
                                                                                                                                                                        • Figure 36: CrossEyes, Richmond, 2017
                                                                                                                                                                      • Superdrug launches online opticians
                                                                                                                                                                        • Snap (formerly Snapchat) revives the idea of smart glasses
                                                                                                                                                                          • Figure 37: Snap smart sunglasses, 2017
                                                                                                                                                                        • Future trends for smart glasses
                                                                                                                                                                          • Figure 38: OrCam smart spectacles, 2017
                                                                                                                                                                        • Safilo developing wearable technology to improve mental focus
                                                                                                                                                                          • 3D printing could revolutionise supply
                                                                                                                                                                            • Virtual ‘try-on’ will help online to grow
                                                                                                                                                                              • Screening schoolchildren
                                                                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                                                                • Advertisers spent £56.5 million in 2016
                                                                                                                                                                                  • Figure 39: Above-the-line advertising expenditure on optical goods and eyecare, 2013-16
                                                                                                                                                                                • The ‘big three’ dominate advertising spend
                                                                                                                                                                                  • Figure 40: Above-the-line advertising expenditure on optical goods and eyecare, by company, 2016
                                                                                                                                                                                  • Figure 41: Above-the-line advertising expenditure on optical goods and eyecare, by company, 2013-16
                                                                                                                                                                                • Advertising specifics
                                                                                                                                                                                  • Specsavers continues its popular ‘Should’ve’ campaign
                                                                                                                                                                                    • Vision Express strikes a serious tone
                                                                                                                                                                                      • Boots’ feelgood advertising
                                                                                                                                                                                        • Optical Express highlights surgery as easy and affordable
                                                                                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                                                                                          • Brand Research

                                                                                                                                                                                              • Brand map
                                                                                                                                                                                                • Figure 42: Attitudes towards and usage of selected brands, January 2017
                                                                                                                                                                                              • Key brand metrics
                                                                                                                                                                                                • Figure 43: Key metrics for selected brands, January 2017
                                                                                                                                                                                              • Brand attitudes: Specsavers stands out for innovation, great customer service and trust. Vision Express is reputable and Boots is a trusted brand
                                                                                                                                                                                                • Figure 44: Attitudes, by brand, January 2017
                                                                                                                                                                                              • Brand personality: Specsavers’ personality is vibrant and fun, while Boots’ greatest strength is accessibility. Optical Express is tired and lacks appeal
                                                                                                                                                                                                • Figure 45: Brand personality – Macro image, January 2017
                                                                                                                                                                                              • Brand Personality: Specsavers is trendsetting and welcoming, while Boots is cutting edge, stylish and reliable. The weakest brands are Tesco (basic) and Optical Express (impersonal)
                                                                                                                                                                                                • Figure 46: Brand personality – Micro image, January 2017
                                                                                                                                                                                              • Brand analysis
                                                                                                                                                                                                • Specsavers’ powerful image combining style and fun along with trust and great value creates broad appeal
                                                                                                                                                                                                  • Figure 47: User profile of Specsavers, January 2017
                                                                                                                                                                                                • Tesco Opticians is accessible but basic, highlighting an opportunity to build a stronger image in the opticians market
                                                                                                                                                                                                  • Figure 48: User profile of Tesco Opticians, January 2017
                                                                                                                                                                                                • Boots Opticians is trusted with a good reputation and delivers good service
                                                                                                                                                                                                  • Figure 49: User profile of Boots Opticians, January 2017
                                                                                                                                                                                                • Vision Express appeals to young upscale adults
                                                                                                                                                                                                  • Figure 50: User profile of Vision Express, January 2017
                                                                                                                                                                                                • Optical Express has highest appeal among affluent 25-34s
                                                                                                                                                                                                  • Figure 51: User profile of Optical Express, January 2017
                                                                                                                                                                                              • The Consumer – What You Need to Know

                                                                                                                                                                                                • Over half had an eye test in 2016
                                                                                                                                                                                                  • 22% switched opticians for their last eye test
                                                                                                                                                                                                    • Young, affluent consumers most likely to have had laser surgery
                                                                                                                                                                                                      • 26% bought fashion sunglasses
                                                                                                                                                                                                        • Prescription glasses dominate the market
                                                                                                                                                                                                          • Plenty of opportunity to increase sales values
                                                                                                                                                                                                            • The big three opticians face competition from supermarkets
                                                                                                                                                                                                              • Style is a key draw for spectacles shoppers
                                                                                                                                                                                                                • Professional fitting gives stores an advantage over online
                                                                                                                                                                                                                • Eye Examinations in the Last Year

                                                                                                                                                                                                                  • 57% of all had an eye examination in the last year
                                                                                                                                                                                                                    • Figure 52: Eye examinations in the last year, 2014-16
                                                                                                                                                                                                                  • Over-65s a core audience for eye examinations
                                                                                                                                                                                                                    • Figure 53: Eye examinations, by age and socio-economic group, October 2016
                                                                                                                                                                                                                  • 9% of all have ever had laser eye surgery
                                                                                                                                                                                                                    • Figure 54: Laser eye surgery, by age, gender, socio-economic group and financial situation, October 2016
                                                                                                                                                                                                                • About the Last Eye Examination

                                                                                                                                                                                                                  • 60% of eye tests were paid for by NHS
                                                                                                                                                                                                                    • Figure 55: About the last eye examination, October 2016
                                                                                                                                                                                                                  • 22% switched opticians for their last eye test
                                                                                                                                                                                                                    • Figure 56: About the last eye examination, October 2016
                                                                                                                                                                                                                  • Special deals and better staff encouraged switch of opticians
                                                                                                                                                                                                                    • Figure 57: Reasons for switching retail opticians, October 2016
                                                                                                                                                                                                                • Users of Prescription Eyewear

                                                                                                                                                                                                                  • 73% of adults use prescription eyewear
                                                                                                                                                                                                                    • Figure 58: Users of prescription eyewear, October 2016
                                                                                                                                                                                                                  • Over 75% of over-45s need help with their eyesight
                                                                                                                                                                                                                    • Figure 59: Users of prescription eyewear, by age, October 2016
                                                                                                                                                                                                                  • Demand for glasses will grow as the population ages
                                                                                                                                                                                                                    • Prescription sunglasses no longer a luxury
                                                                                                                                                                                                                      • More contact lenses suitable for over-45s
                                                                                                                                                                                                                        • Comfortable eyes
                                                                                                                                                                                                                          • Opportunity to expand contact lens wear
                                                                                                                                                                                                                            • Figure 60: Users of prescription eyewear, glasses, prescription sunglasses and contact lenses, by age, October 2016
                                                                                                                                                                                                                        • Fashion Sunglasses and Contact Lenses

                                                                                                                                                                                                                          • 26% bought sunglasses in the last year
                                                                                                                                                                                                                            • 5% claim to have bought fashion contact lenses
                                                                                                                                                                                                                              • Figure 61: Purchasers of fashion eyewear, October 2016
                                                                                                                                                                                                                            • ABs and 16-34s are core customers for fashion sunglasses
                                                                                                                                                                                                                              • Figure 62: Purchasers of fashion sunglasses, by age and socio-economic group, October 2016
                                                                                                                                                                                                                          • Purchasers of Prescription Eyewear

                                                                                                                                                                                                                            • Prescription glasses dominate the market
                                                                                                                                                                                                                              • 18% of those with a prescription bought contact lenses
                                                                                                                                                                                                                                • Figure 63: Purchases of prescription eyewear, October 2016
                                                                                                                                                                                                                              • 22% of wearers bought two or more products
                                                                                                                                                                                                                                • Figure 64: Purchases of prescription eyewear, repertoire, October 2016
                                                                                                                                                                                                                            • Retailers Used for Prescription Eyewear

                                                                                                                                                                                                                                • Figure 65: Retailers used for last prescription eyewear, 2014-16
                                                                                                                                                                                                                              • Specsavers is used by 49% of those who bought glasses
                                                                                                                                                                                                                                • Vision Express captures 15% of contact lens purchasers
                                                                                                                                                                                                                                  • Independents used by those with healthy finances (14%)
                                                                                                                                                                                                                                    • Contact lenses (5%) more likely to be bought at online pureplay than glasses (2%)
                                                                                                                                                                                                                                      • Why online sales have not performed better
                                                                                                                                                                                                                                        • Tesco outruns Asda
                                                                                                                                                                                                                                          • Figure 66: Retailers used for prescription eyewear, October 2016
                                                                                                                                                                                                                                        • 37% of those who switched from another optician bought at Specsavers
                                                                                                                                                                                                                                          • Figure 67: Retailers used for last prescription eyewear, same or switched, October 2016
                                                                                                                                                                                                                                      • Interest in Innovation

                                                                                                                                                                                                                                        • 39% of 16-34s are interested in reducing digital eyestrain
                                                                                                                                                                                                                                          • 18% would like a blue light filter
                                                                                                                                                                                                                                            • 41% of over-65s interested in multifocal spectacle lenses
                                                                                                                                                                                                                                              • 22% of younger Millennials interested in smart connected glasses
                                                                                                                                                                                                                                                • More opportunity to add value to spectacle lenses
                                                                                                                                                                                                                                                  • Interest in photochromic lenses is high
                                                                                                                                                                                                                                                    • Figure 68: Interest in lens innovation, October 2016
                                                                                                                                                                                                                                                • Attitudes Regarding Opticians

                                                                                                                                                                                                                                                  • Style comes above price when choosing glasses
                                                                                                                                                                                                                                                    • Desire for fitting services will keep people away from buying online
                                                                                                                                                                                                                                                      • Some will be lured to buy online to make savings
                                                                                                                                                                                                                                                        • 23% like the idea of a self-test app for eyes
                                                                                                                                                                                                                                                          • 30% delay an eye test until they think their eyes have changed
                                                                                                                                                                                                                                                            • 26% believe independents look after eyes better
                                                                                                                                                                                                                                                              • Barriers to wearing contact lenses
                                                                                                                                                                                                                                                                • Laser surgery is a key competitor to contact lenses
                                                                                                                                                                                                                                                                  • Figure 69: Attitudes regarding opticians, October 2016
                                                                                                                                                                                                                                                                • Target groups
                                                                                                                                                                                                                                                                  • Figure 70: Target groups for opticians, October 2016
                                                                                                                                                                                                                                                                • Expertise matters more as consumers age
                                                                                                                                                                                                                                                                  • Figure 71: Target groups for opticians, by age, October 2016
                                                                                                                                                                                                                                                                • Cost Conscious attracted to buy online
                                                                                                                                                                                                                                                                  • Figure 72: Target groups for opticians, retailers used, October 2016
                                                                                                                                                                                                                                                                • Brands Matter display lowest loyalty to opticians
                                                                                                                                                                                                                                                                  • Figure 73: Target groups for opticians, switched/used the same optician, October 2016
                                                                                                                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                                                • Market sizing and segment performance
                                                                                                                                                                                                                                                                  • Abbreviations
                                                                                                                                                                                                                                                                    • Consumer research methodology
                                                                                                                                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                                      • Market forecasts by segment
                                                                                                                                                                                                                                                                        • Market forecast – Spectacle frames
                                                                                                                                                                                                                                                                          • Figure 74: Consumer spend on spectacle frames, 2011-21
                                                                                                                                                                                                                                                                          • Figure 75: Consumer spend on spectacle frames, 2011-21
                                                                                                                                                                                                                                                                        • Market forecast – Spectacle lenses
                                                                                                                                                                                                                                                                          • Figure 76: Consumer spend on spectacle lenses, 2011-21
                                                                                                                                                                                                                                                                          • Figure 77: Consumer spend on spectacle lenses, 2011-21
                                                                                                                                                                                                                                                                        • Market forecast – Contact lenses
                                                                                                                                                                                                                                                                          • Figure 78: Consumer spend on contact lenses, 2011-21
                                                                                                                                                                                                                                                                          • Figure 79: Consumer spend on contact lenses, 2011-21
                                                                                                                                                                                                                                                                        • Market forecast – Contact lens solutions
                                                                                                                                                                                                                                                                          • Figure 80: Consumer spend on contact lens solutions, 2011-21
                                                                                                                                                                                                                                                                          • Figure 81: Consumer spend on contact lens solutions, 2011-21
                                                                                                                                                                                                                                                                        • Market forecast – Eye examinations
                                                                                                                                                                                                                                                                          • Figure 82: Consumer spend on eye examinations, 2011-21
                                                                                                                                                                                                                                                                          • Figure 83: Consumer spend on eye examinations, 2011-21
                                                                                                                                                                                                                                                                        • Market forecast – Eye drops
                                                                                                                                                                                                                                                                          • Figure 84: Consumer spend on eye drops, 2011-21
                                                                                                                                                                                                                                                                          • Figure 85: Consumer spend on eye drops, 2011-21
                                                                                                                                                                                                                                                                        • Forecast Methodology

                                                                                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                                                                                        To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                                                                        Optical Goods Retailing - UK - February 2017

                                                                                                                                                                                                                                                                        US $2,672.70 (Excl.Tax)