Sales of prescription frames are expected to undergo overall a compound average annual growth rate (CAGR) in value of 1.7 percent in the five major European countries during the 2015-20 period, according to Strategy With Vision (SWV), the international consultancy run by Mark Mackenzie. This compares with a CAGR of 1.2 percent during the 2011-15 timeframe.
Unit sales of frames grew by 1.2 percent in the last four years, as there was practically no increase in average selling prices. Going forward, SWV predicts that the growth in volume will rise to 1.3 percent and that prices will tend to go up because opticians and their customers are putting more value and creativity into their purchases.
Conversely, SWV sees the lens market experiencing a CAGR in value of 1.2 percent through 2020, down from the annual growth of 1.4 percent of the past four years. In terms of units, the growth of the lens market will likely decline from 1.5 percent to 0.9 percent a year, but this will be partly compensated by higher consumption of progressive and other value-added lenses, thanks to technological progress and marketing.
SWV's study predicts higher rates of growth for prescription frames than lenses for one main reason. The “reglazing” trend – consisting of putting new lenses on an old, cherished frame – is still strong in Europe, representing about 13 percent of all purchases of new lenses. However, Mackenzie predicts that the ratio will go down because the optical retail chains, which generally don't provide this service, are gaining market share.
According to another report by SWV that covered optical retail chains with ten stores or more in 2014, they had 45 percent share in a market worth just over €20 billion at consumer prices in the five major European countries.
The drop in the growth of the market for lenses will be mainly due to demographic trends: The number of people needing vision correction will grow by only about 0.5 percent a year going forward, down from 0.8 percent in the past few years, as the growth in the population – 318 million for the European Union – will fall from 0.4 percent to 0.2 percent a year. This will be slightly compensated by the ageing population.
Limiting the damage, recent studies conducted in France and the U.S. indicate that the increasing use of smartphones and tablets among the younger people is leading to higher levels of myopia. In France alone, the number of people requiring vision correction may actually go up by 1.0 percent a year.
These and other findings have just been published by SWV as part of the annual update of its International Market Models (IMM) study, which covers in detail all the aspects of the optical market in the five major European countries, based on sell-in data collected from suppliers representing more than 80 percent of the offer. It also has data on sales of sunglasses, contact lenses, low-vision products and accessories, based in part on its own retail surveys.
The sell-in trends vary from one country to the other, Mackenzie points out. In France alone, a big factor of the declining growth of the lens market will be the recent change in French legislation on state and mutual insurance reimbursements for new glasses, which are now permitted for adults only after two years. Statistics show that 17 percent of French customers have been purchasing new glasses every year, but this will evidently change, although they seem to be prepared to spend more to get closer to the price thresholds set for the reimbursements.
In fact, the most recent statistics put out by GfK for the French market, which are based on a retail panel, indicate that sales of lenses and frames grew by 4.4 percent and 3.3 percent in the first quarter, although the new regulations came into force on Jan. 1. They set reimbursement limits of €150 for frames, €320 for single-vision lenses and €450 for progressive lenses. The overall optical retail market rose by 3.3 percent in France to €6.54 billion, according to GfK.
SWV has also published an update of its directory of independent RX laboratories operating in Europe, the Middle East and Africa. An updated edition of its World Lens and Frame Demand study, covering 60 countries, will come out in August.
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