The UK ophthalmic goods and services market maintained growth over the review period and was worth an estimated £2.74bn in 2007, a rise of 18.3% from a value of £2.32bn in 2003.
Ophthalmic goods comprise the largest sector of the market, with spectacles dominating sales. A trend in preference for designer frames has greatly boosted excitement in the sector, and consumers using NHS vouchers in part-payment for spectacles also raised their average spend in 2006/2007, according to data from the Federation of Ophthalmic and Dispensing Opticians (FODO). The market is fiercely competitive in terms of promotions and discounted second pairs; therefore, strong volume sales have sustained healthy value rises, despite a fall in the average price of a pair of spectacles.
Contact lenses have also made strong gains in the ophthalmic goods sector and have risen in value by 19.4% since 2003 to an estimated £430m. Strong growth was seen particularly in 2007, when new materials and developments in the manufacturing of soft disposable lenses have enabled more users to wear them in comfort. Uptake is still increasing, and fewer wearers are giving up and returning to spectacles. Many more women than men wear contact lenses, and one of the industry's challenges must be to encourage more men (as well as more people in general) to wear lenses.
The ophthalmic services sector accounted for 14.9% of the total market in 2007. Strong growth in the number of NHS-paid sight tests since 2003 has reduced the number of privately paid sight tests. However, the overall value of the sector has grown, as has the number of new and changed prescriptions. This augurs well for the future and underlines the intrinsic robustness of this sector.
Despite price deflation and a fiercely competitive retail arena, which includes an active e-retailing channel for contact lenses, there is optimism within the market. On the high street, ambitious and thriving chains of opticians are looking to consolidate their position, and there have been a number of takeovers in 2007/2008. While many independent retailers continue to grow, offering higher levels of service and individual treatment, others are responding to market pressures and accepting a buyout.
The future may be one of more diversity — the threat of laser surgery has encouraged a number of retailers to offer alternatives in terms of contact lens vision correction technology. Specsavers also offers hearing correction, as do a number of other operators. Optical Express — the largest laser therapy operator in the UK, which also combines activities with conventional optometry — has recently ventured out into cosmetic dentistry, cosmetic surgery and non-surgery.
Overall, Key Note anticipates a period of slower growth for the market over the forecast period (2008 to 2012), taking into account the current economic outlook and an increasingly discounted market.
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