UK Retail Optical Eyewear and Eyecare

SECTOR STRUCTURE

Companies in the optical retail industry specialise in selling eyewear frames, prescription lenses, contact lenses and related accessories. They operate from specialised stores where trained and qualified staff assist customers in selecting the appropriate eyewear. Many of these locations offer comprehensive eye examinations, conducted by licensed professionals, supporting both vision correction and overall eye health.

Sector revenue in the UK is forecasted to grow at a compound annual rate of approximately 4% over the next five years, reaching around £7bn by 2030. This growth is creating new business opportunities for providers of direct eyecare products and services, as well as suppliers of associated ophthalmic apparatus and equipment, along with their financial backers.

UK eyecare is delivered by 15,000 optometrists and dispensing opticians operating in more than 7,000 practices. These range from major high street companies to smaller independent providers, as well as hospital eye departments.

The market broadly segments into about 10 major corporate companies, including major retail chains and supermarkets, who collectively maintain an estate of approximately 2,500 eyecare stores. Smaller, independent opticians hold an estate of about 4,500 stores, resulting in an overall market split of roughly 35/65%.

The large corporates account for over 80% of spectacle retail sales in today’s market, with the sector’s top-end dominated by three major players: Specsavers, Walgreens Boots, and Vision Express, who together hold over 70% of the total corporate market segment.

MARKET DIRECTION

Given the substantial combined market share of the largest optical retail chains, it is hypothesised that these major players will not seek significant estate expansion in the short to medium term due to market saturation. Instead, they are likely to focus on attracting more customers to existing stores and increasing sales per customer at each location. This strategy is already driving expansion into additional services, such as audiology and retail hearing aids.

Optical retail practices generate revenues from eye tests, spectacles and additional ophthalmic healthcare services provided by the optician. Consequently, the advancing technological design of modern ophthalmic equipment, particularly digitalisation and automation, reduces the time required for opticians to perform eye examinations. This increases customer throughput and creates greater opportunities for upselling healthcare services.

Nevertheless, in the context of the national economy’s ebb and flow, the structure of the optical retail market sector has radically altered in recent history.

Sales of spectacles are, to some extent, a discretionary consumer item, which can be deferred when ‘money is tight’.  When customer foot traffic is light, opticians may respond by extending the use of older equipment. Free eye tests and BOGOF deals on frames, introduced in response to the retail downturn following the financial crisis and more recent ‘cost-of-living’ crisis, have significantly benefitted the major optical retail chains and their grocer-as-optician counterparts, leading to the significant decline in smaller or independent providers.

LEVELS OF COMPETITION

Supermarkets, serving as comprehensive retail hubs and offering eyewear alongside groceries and other products, place them in direct competition with specialist opticians by providing lower-cost, affordable glasses and contact lenses. However, online retail has yet to seriously impact the profession as it has others, thanks to the need for regular eye tests and updated lens prescriptions, which helps protect bricks-and-mortar participants. Nevertheless, advancing technology is making laser eye surgery increasingly precise, positioning corrective surgical procedures as a viable, permanent alternative to eyewear and contact lenses.

In this competitive landscape, it is hypothesised that the survival of the sector’s remaining independent opticians will be largely determined by their ability to offer higher levels of service than optical chains, supermarkets and online suppliers are willing to provide. To thrive, independents must cultivate customer loyalty driven from the shop floor upwards in locations convenient for clientele. The market environment will then polarise, accommodating metropolitan city centre-based optical chains and tier-II town and village-based independents, along with out-of-town retail park supermarkets and online participants.

CSA’s strategy and due diligence advisory services sit alongside and complement the day-to-day activities of company management. We provide independent and objective evaluations of strategic direction and customer value creation, providing a road map for business performance improvement.

For information about how we can help you to assess business and market attractiveness please call: 0208 947 5108