A tale of two lens markets: independents and chains

February 15, 2006

For the 12-month ending (ME) period closing Sept. 30, 2005, the vision-care industry in the United States generated nearly $26.2 billion in revenue, an increase of 3.8% compared with the previous 12-month period.

For the 12-month ending (ME) period closing Sept. 30, 2005, the vision-care industry in the United States generated nearly $26.2 billion in revenue, an increase of 3.8% compared with the previous 12-month period.

The lens market, which accounted for 29.3% of all vision-care industry revenue, grew by 1.8% during the September 2005 12 ME period and generated $7.67 billion in sales.

As of September 2005, there were 155.7 million American adults wearing some form of vision correction, representing 70% of the adult population. For people using vision correction, eyeglasses were the dominant choice.

In September 2005, 144.6 million American adults regularly wore prescription eyeglasses, representing 65.2% of the adult population. This number has gradually decreased over the years, both in absolute numbers and as a percentage of the total population. In September 2003, 69% of the adult population (149 million people) regularly wore eyeglasses. Most of those moving away from using eyeglasses as a method of vision correction are young (under the age of 24) males.

Despite the slight decline in eyeglass usage, the lens market has been fairly resistant, with more than 78.1 million pairs of lenses being dispensed during the September 2005 12 ME period. This represents a 0.4% decline in terms of units sold. However, because of price increases, the aggregate value of the lenses sold in the United States increased 1.8% during this period, generating $7.67 billion in sales.

Approximately 43.5% of all lenses sold in the United States were sold via an independent optical shop, representing more than 32.5 million pairs of lenses. In terms of dollars, roughly 48% of all lens sales were generated in an independent optical shop, translating into roughly $3.68 billion. It is interesting to note that during the September 2005 12 ME period, more than 58.8 million eye exams were conducted at independent optical retail establishments. Roughly 64.8% of all eye exams conducted in the United States were conducted at an independent retail location by an eye-care professional. For every 100 eye exams conducted at an independent retail location, an average of 55 lenses were dispensed and sold. Also, every eye exam conducted at an independent optical retail location generated an average of $69 in lens sales.

Of the 32.5 million lens pairs sold by independent locations, 14.5 million pairs were single-vision lenses, 8.7 million pairs were multifocal lenses, and 9.2 million pairs were progressives. There were 5.4 million pairs of photochromic lenses sold at independent retail outlets and 6.4 million pairs sold possessed anti-reflective (AR) coating. When compared with chain locations, independent retail outlets were more likely to sell multifocal lenses, progressive lenses, and photochromic lenses.

During the past 2 years, independents have slowly lost ground to other optical distribution channels. Since September 2003, independent optical shops have seen their share of lens units sold decline by 0.6 share points while their share of lens dollars generated declined by 0.5 share points.

A large portion of the slide in outlet share can be attributed to single-vision lenses and multifocal lenses. The loss in outlet share would have been worse had it not been for the slight increase in sales of progressive lenses and the steady sales performance of photochromic lenses.

On the positive side for independent outlets, the average price for a pair of eyeglasses increased during this period from $110.41 in September 2003 to $113.80 in September 2005.