Opticians Industry Overview

Excerpt from Opticians Report

Companies in this industry sell prescription and other eyeglasses and contact lenses; they usually include a lab on premises to grind lenses to specifications. Major US companies include Eye Care Centers of America, LensCrafters, Pearle Vision, and US Vision; major companies based outside the US include Boots Opticians (UK), Fielmann (Germany), and De Rigo, Luxottica, and Safilo (Italy).

Competitive Landscape

Demand is driven by demographics, fashion, and changing health care practices. Most important is the aging of the US population, which is increasing demand for eye exams and glasses. Large retailers enjoy economies of scale in purchasing and can offer a wider range of product styles. Small retailers can often compete successfully with large chains by offering convenient locations, specialized products, or superior service. Eyeglass purchases are mildly cyclical with the economy, as many consumers view extra glasses as an expense that can be deferred. The industry is concentrated: the 50 largest companies generate about 65 percent of revenue.

Products, Operations & Technology

Opticians sell eyeglasses and contact lenses in retail stores based on prescriptions written by optometrists or ophthalmologists. Often stores employ an on-site optometrist who performs eye exams; optometrists may also own and operate retail stores. Lenses and frames account for the bulk of store sales. Frames, which come in enormous variety and a wide range of prices, are often branded and can produce high markups, while contact lenses and lenses for glasses are mostly commodity items with fairly low margins. A typical store may hold an inventory of 500 frames in 100 different styles. The price range of frames a store carries depends on the demographics of local shoppers. Opticians also sell non-prescription products like sunglasses and reading glasses (magnifiers).