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After five consecutive years of growth, challenging times lie ahead for independents, according to the latest Mintel report, Optical Goods and Eyecare.

The report forecast a marginal downturn in the optical market until 2013. It attributed this to the erosion of margins because of discounting patterns set by the multiple chains, the rise in the number of supermarket optical outlets and the increase in the number of internet-only retailers. As reported in Optician last week, (July 4), the market has been buoyant over the past five years, with consumer spending up by 20 per cent, to £2.7bn. However, Mintel predicted only 13 per cent growth over the next five years.

In terms of discounting, the report authors forecast that the marketing of spectacles would still be largely restricted to buy-one-get-one-free or similar promotions. This marketing tool is especially popular with Specsavers, it pointed out, and other multiples have been forced to join in the discounting.

Further competitive pressure on independents is forecast to come from the expansion of in-store opticians in supermarkets Asda and Tesco, as well as their growing involvement in internet-based selling.

However, on a positive note, an increasingly affluent population could be persuaded to spend more per visit through making higher-priced purchases, such as opting for designer frames or paying for premium lenses.

Mintel also suggested that contact lens discounting was likely to intensify over the coming years, with manufacturers needing to work harder to attract and retain new wearers. It also reaffirmed the belief that customers are increasingly buying contact lenses on price and are actively shopping around for the cheapest deal. This will have the long-term effect of depressing CL prices.

However, demand for CLs is expected to rise between 2008 and 2013, with sales driven by the latest generation of silicone hydrogel lenses, which are designed to offer an increase in comfortable wearing time.

In recent years, consumer desire and willingness to pay for convenience have encouraged a trend towards daily disposable lenses, helping to drive up market values and volumes. But Mintel found that in the past year there has been a revival in monthly disposables as some consumers have switched to silicone hydrogel lenses seeking greater comfort.

The report added that at present, manufacturers have not been able to produce a similar lens for daily use at a competitive price although this is likely to happen in the near future. (Johnson & Johnson will launch the 1-Day Acuvue TruEye in autumn 2008).

The spectacle frame market continues to be dominated by the leading players, despite the fact that there around 160 suppliers in the UK. Luxottica continues to head the market, in which the four leading players account for 41 per cent share.

According to the report, the frame market has changed greatly over the past five years, with growth being driven by a wide choice of well-recognised designer brands which have entered the market and helped to encourage higher average spend. Although major designer labels are important, other mass-market consumer brands are entering at a faster pace. Recent examples include Levi's.

Mintel highlighted the general public's continuing low awareness of the health benefits of eye examinations. However, the ageing population will be a favourable factor in the coming years. The steep rise in those aged over 65 will drive eye exams and eye health screening programmes. The growth in the number of 45-54 year-olds is especially favourable according to Mintel because they are a prime target for varifocals and bifocals.

The report pointed out that the decline in the number of 10-19 year-olds over the next five years could impact on the market for children's and teenagers' frames. However, there is a forecast rise in those aged below nine years, which may see parents trading up for more durable products that can withstand children's lifestyles.

The trend for increasing numbers of people with desk-based jobs in front of computer screens will continue. This is likely to drive demand for spectacles and eye examinations. The report authors also speculated that companies that issue uniforms to staff might consider 'uniform' spectacles, complete with matching corporate logos.

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