Market analysis: Value growth slowing down

Following the UK referendum decision to cease membership of the European Union the GfK Consumer Confidence Index measured an immediate and significant drop in economic sentiment during the following months of July and August as political and financial uncertainty reigned. In September the index results showed that consumer confidence had returned to the same level captured in June, immediately ahead of the referendum, and so in the short term at least appears to have recovered from any Brexit-related jitters. In this edition GfK looks at the performance of GB opticians over this unique Q3 2016.

While the optics product groups tracked by GfK have previously proved resilient to economic uncertainty, as shown by their robust performance over the 2008/09 recession in the UK, there has been a marked slowdown in value growth in Q3 2016. The rate of retail value growth at GB opticians for the four product groups combined (spectacle frames, contact lenses, contact lens care products and sunglasses) stood at +5.7% year on year in Q2 2016. In Q3 2016 the rate of growth has slowed to +2.3% – less than half the rate of value growth seen in the previous quarter. Breaking this figure down by the individual product groups tracked we see the strongest rate of growth achieved by sunglasses which have seen sales value increase by +10.9% compared to Q3 2015. Spectacle frames, the largest product group tracked by value sales, saw value growth slow from +5.0% in Q2 2016 to +0.7% in Q3 2016, a significant slowdown with spectacle purchases perhaps easier than contact lens purchases for patients to delay and/or economise on by opting for lower priced options. Contact lenses value growth was down by a much lesser extent than spectacle frames with the value growth rate of +7.1% achieved by GB opticians in Q2 2016 falling to +4.0% in Q3 2016. Growth of contact lens care products continues to track behind that of contact lenses, at +2.3% in Q3 2016, as an increasing proportion of contact lens patients opt for daily options and so require fewer of the associated care products.