Perkins takes stock

Specsavers won the 2005 Optical Chain of the Year Award. Founder and group chairman Doug Perkins gives his assessment of the state of the optical market and reflects on the challenges that lie ahead in the coming year

Retailers will remember 2005 for the fall in consumer confidence on the high street. Respected retail brands have reported significantly lower sales than in recent years. With consumers wishing to spend less, prices are falling while overheads increase. This 'stagflation' type of economy cannot be described as a favourable environment for mainstream retailing - or for those in optics - as we enter 2006.

We are fortunate in optics that small recessionary economic cycles pass us by because consumers are reluctant to cut back their spending on essentials such as healthcare. But even our healthcare role cannot be said to make us immune to this downturn.

As economic forecasts show no imminent rise in confidence, I am certain, at least in England and Wales, that the prevailing conditions will result in some form of consolidation of the optical industry. It seems the best that practices can hope for is to maintain regular eye examination volumes, but accept that consumers will seek lower-price products.

Dutch experience

At Specsavers, we have become familiar with stagflation economic conditions from our Dutch operation. The Netherlands - like Germany - has experienced low retail confidence and virtually zero inflation for over three years.
Unlike the UK, the Dutch optical market is completely deregulated and the public do not associate optics closely with healthcare. Therefore, unlike the UK, when the retail index of activity falls by 5 per cent so does optics.

The experience in the Netherlands holds an important lesson for the UK profession - we must resist further deregulation. In the long-run this makes sense both economically and professionally.

Existing funding priorities give optometry a low profile and I urge opticians - both corporate and independent - to support their LOCs to make sure that optics moves up the ladder of government funding priorities.

I believe we should campaign to extend the Scottish model to the rest of the UK. If we can achieve a nationwide deal for high-quality optometry services and make contributions regionally to primary care trusts this will move the profession steadily forward.

Lobbying that has taken place so far has highlighted the potential benefits of strong political communication, but it does require strong, proactive development of the economic and healthcare case for optometric primary care.

A further key change in 2005 was the controlled deregulation of the contact lens market. With both daily and monthly lenses increasingly being dispensed outside high street practice, and the march of globalisation, driven by the internet, it was inevitable that new regulations would be introduced.

Change for the better

I believe it is in the interest of the profession that we make these new regulations work, as they are far better than having no regulations at all. If the traditional high street practices continue to promote the advantages of a seamless supply of lenses, I am optimistic that the 2005 early migration may well flatten out. There has been an understandable fear that, as a result of the internet activity of spectacle traders and supermarkets, mass migration of customers would take place.

Even though these changes have been accompanied by high-profile public relations, I do not feel that the changes in market share have been substantial. I believe there is considerable power in the model of healthcare that has served the British consumer well for many years.
The Scottish model offers an opportunity to move forward and to protect the profession from threats, as we compete for funding with more proactive groups.

As we enter 2006, I see great opportunities to improve our position, but we must work together to ensure our rightful place.
Without unity, our future may be more exposed to the threats which have become all too familiar elsewhere in Europe.