As businesses across the UK feel the effects of by economic fallout, either from UK or worldwide political decisions, optical practices have implemented changes to avoid worst case scenarios around energy bills, employee retention, patient satisfaction and long-term business resilience. Optical practices have indicated that having a proactive rather than a reactionary business approach during the cost of living crisis will ensure practices can withstand further hardships.
Peter Telfer, managing director at Urquhart Opticians, summarised the extent of the situation felt by many: ‘The cost of living crisis has had a number of impacts on our business. Patients are broadly more hesitant to change spectacles, team members are experiencing rising costs at home and, therefore, wage pressure is being created, and the costs of operating our business have increased.’
Energy audits
David Crystal, optometrist and founder of Crystal Optometry, made changes after an energy audit, which found the practice’s monthly, as its monthly direct debit energy bill had increased fivefold from £106 to £524 in October, compared to 2021. He said that mitigations have been made, including: turning off high-energy usage devices, such as illuminated signage and display screens; switching the air conditioning system to heat mode and abandoning electric radiators; setting computers to energy saving mode; and installing low-energy lights.
However, Crystal emphasised that those savings would only be realised in time. ‘For now, practice economics dictates immediate changes. We reviewed our costs, changed our card services provider and increased our supplementary charges for eye exams by £5,’ he added.
Telfer also highlighted energy bills as Urquhart Opticians’ main challenge to business cost. ‘We’ve had practices quoted 300% increases and the challenge is that, where fixed contracts end, energy suppliers are not offering any fixed rates. We’re counteracting this by making sure that we upload meter readings every month, so that we are only paying for what we use while making sure that we provide a comfortable environment for patients and colleagues, without unnecessary energy use.’
During times of uncertainty, security has been found in a partnership. Telfer commented: ‘As a joint venture partner with Hakim Group, one of the many reasons that we joined was that it does offer more buying power through economies of scale.’
Last week’s Optician article by Mo Chaundhry (14.10.22) outlined that, while commercial energy bills have not been saved by a price cap in the same way as household energy bills, the government has intervened to cap the price of commercial energy tariffs for six months from October 1, 2022. The scheme would give discounted gas and electricity unit prices for those on non-domestic contracts for six months, with businesses paying no more than 7.5p per KWh of gas and 21.1p per KWh of electricity.
Business resilience
Simon Berry, CEO of Durham-based practice Simon Berry Optometrist, said his practice focused on boosting financial stability and business resilience more than increasing spectacle prices. He explained: ‘The clinical skill involved in an eye test and the dispense of a pair of glasses is often not valued by patients because they don’t know what is involved. We are changing our charging structures to include eye care plans that emphasise the clinical skill and the technology we have to examine eyes. I think the more educated our patients are, the more resilient our business will become.’
However, Berry admitted that it was also necessary to raise lens prices to counteract the bills and interest rates rising on loans. ‘I’m sure we will lose some patients but really this is the only way to make sure we are a viable practice,’ he added.
In terms of prices, Urquhart has also made ‘modest adjustments’, using the Scottish NHS fee hike to 4.5% as a benchmark for other price adjustments, while limiting passing on costs where possible and increasing wider finance choices like split payment options. Price sensitivity has been reflected in the location, ensuring products and services are suitable for each market it operates in.
Consumer behaviour sways
There seem to be mixed feelings on the consumer behaviour front. Telfer commented: ‘We’ve seen slightly lower numbers of patients purchasing new spectacles, with some looking to reuse existing frames. Patients do seem, in places, to be slightly more cost-conscious, but we are still seeing the post-Covid-19 trend where patients are looking for spectacles and are still keen to invest in a good quality pair that meets their lifestyle needs.’
He added that patients are looking for more offers during these times and as a result Urquhart has introduced additional deals, such as complimentary premium eye exams, with a longer appointment and optical coherence topography scan.