This month most of our benchmarks, including total eye examinations, the sales volume of spectacles dispensed and total turnover, show a marginal improvement from September. However, with the exception of progressive lens sales, contact lens new fits and the value of solutions, the result are lower than last October.
As we have seen the total number of eye examinations decreasing year on year, for our sample of independent opticians, we thought it would be interesting to take a closer look at how this has affected the dispensing rate and how the different sized practices have performed. We are also introducing a new sponsor for Optician Index, Adaro Direct, which is not only part funding the trend analyses and benchmarking program for independent opticians but will also be providing some interesting sales data.
Turnover and eye examinations
Total practice turnover increased by less than 0.5 per cent from September to 165 Index points but this is 1 per cent lower than October last year. The total number of eye examinations increased by 3 per cent to 100 Index points from last month and this is fractionally higher than October 2013. Turnover per eye examination fell by £14 this month to £167 which is the same value as last October. The percentage of examinations which are NHS compared to private is a little higher this month at 76 per cent which is also the same as October last year.
Dispensing
The average dispensing rate is the percentage of total eye examinations resulting in a prescription spectacle frame being purchased, which is calculated by dividing the total volume of dispensing by the number of eye examinations carried out. This month the dispensing rate has fallen to 62 per cent which is one percentage point lower than October last year. Figure 1 shows the comparison for this rate over the last two years.
For the first half of 2014 the dispensing rate was broadly flat but failed to match the same period in 2013. In the second half of this year the dispensing rate has improved over 2013, derived from both a fall in the number of eye examinations and a comparative increase in the number of spectacles dispensed as we see later. The average monthly dispensing rate for the first 10 months of the year, for which we have the results, is the same as last year, 65 per cent.
Average dispensing rates differ significantly between practices (Figure 2). This month the sample has a minimum dispensing rate of 29 per cent and a maximum of 173 per cent which was reported by one of the smaller turnover practices. A figure over 100 per cent can be explained by patients electing to take their prescription to that practice for fulfilment, deferring a purchase decision having completed the eye examination in a previous month or by purchasing two or more pairs of spectacles.
The chart shows our sample in turnover groups for October, the lower quartile in each turnover group represents the 25 per cent returning the lowest dispensing rates for the month. The median quartile represents the middle group, 50 per cent of the sample, and the upper quartile is the 25 per cent recording the highest dispensing rates for the month. Generally it’s not appropriate to report in averages as sample practices vary considerably; however, with a quartile analysis they become more meaningful.
To identify where your practice fits and assess performance against the sample, calculate your gross practice turnover and dispensing rate for October, identify which quartile you fall into. In all turnover groups, if your practice is in the lower quartile, it is perhaps possible for you to re-evaluate your range of products or make operational changes to improve service or reduce the number of prescription-only clients. If your practice is in the upper quartile the challenge is to ensure you maintain this level by continuing to evaluate all aspects of your business.
For our sample, the averages show that the lower turnover group produced the highest average dispensing rate of 69 per cent during October, followed by the higher turnover group at 61 per cent and the middle turnover group at 57 per cent. In the lower and median quartiles, for each turnover group, the difference was negligible but the upper quartile in the lower turnover group out-performed the other two groups significantly. Twelve months ago the same analysis showed the middle turnover group out-performing the higher turnover group but it should be noted that this is based on just one month’s figures.
Sample average total dispensing, the Index value of the total number of spectacles of all lens types sold (Figure 3), shows the peak this year shifting from February to May and although falling for the second half is above the volume for the same period in 2013. October saw an increase of 1 per cent on last month to 90 Index points which is almost the same as last October’s figure and year on year growth is fractionally negative.
Lenses
The lens mix this month (Figure 4) is 70 per cent single-vision, 20 per cent progressive and 10 per cent bi/trifocals. In the same month last year the lens mix was 71 per cent single-vision, 20 per cent progressive and 9 per cent bi/trifocals.
Single-vision lenses reduced by 4 per cent from last month to 60 Index points, 4 per cent lower than last October. Bi/trifocals increased by 10 per cent from September to 56 Index points, also 4 per cent lower than last October. Progressive lens sales were up almost 2 per cent on last month at 210 Index points, this is 1 per cent higher than October last year and is the only lens type showing positive annual growth.
New contact lens fits were down by 2 per cent to 112 Index points from last month but this is 2 per cent higher than October last year. The value of solutions sold was also slightly lower than last month at 87 Index points but this is 14 per cent higher than October 2013.
Sales figures supplied by Adaro Direct, the ordering system for all major contact lens manufacturers and new sponsor of Optician Index, show the breakdown of contact lens types purchased for the three months up to the end of October 2014 (Figure 5) and the proportion of daily disposable and frequent replacement lenses (Figure 6) for the same three-month period. These results originate from a sample of over 25,000 UK orders placed through Adaro Direct by more than 400 independent practices and regional chains.
All figures shown are adjusted to a 25-working-day month. In October 2014 there were 27 working days.
Summary
- Total practice turnover 1 per cent lower than last October at 165 Index points
- Total number of eye examinations 3 per cent higher than last month at 100 Index points which is the same figure as October 2013
- Practices in the lower turnover group have a higher average dispensing rate than those with higher revenue during October
- Sample average total dispensing 1 per cent higher than last month at 90 Index points but annual growth is marginally negative
- Sales volume of single-vision lenses fell by 4 per cent from last month to 60 Index points
- Value of solutions sold 14 per cent higher than October last year at 87
Benefits of joining the index
- Monitor the practice performance of your practice month by month
- Customised reports benchmark your performance against your competitors
- Identify new trends quickly
- Optimise performance and establish competitive advantage
- Optician Index is free of charge to participating practices
If you would like to join or discuss the business value in more detail, contact Lynn Hawkins on 01622 260595 or email l.hawkins@businessbenchmarks.co.uk