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Specsavers revenue tops $860m – up by $75m

04/04/2017By Matthew Woodley
Specsavers Australia has announced total annual revenue for 2016-17 of $861 million; a $75 million or 9% increase over the previous year. This result is, effectively, a same-store comparison given the company opened only one new practice in the previous 12-month period.

Instead, gains were made in average sales, which rose to just under $2.7 million per store per annum, an increase of $400,000 since February 2015. This growth is highlighted by a single store registering more than $6 million in sales for the first time in Australia.

A further 10 stores achieved more than $5 million in annual sales – double the number recorded last year – while 30 stores managed $4 million in annual sales and 87 cracked the $3 million mark.

However, while total revenue has increased, when compared to the double-digit growth the optical chain had recorded in Australia over the past few years the 9% figure represented a slight decline.

Nonetheless, Specsavers distributed 4.3 million optical frames throughout Australia – up 400,000 from last year – and conducted 3.34 million eye examinations during the past 12 months.

Peter Larsen, Specsavers optometry director
Peter Larsen, Specsavers optometry director

Optometry director Mr Peter Larsen said there were many reasons for the continued success, which included greater public awareness of eye health and the importance of regular eye tests.

“We are constantly promoting eye health initiatives to consumers, resulting in increased eye tests,” Larsen said adding: “We are always focused on offering the best possible value to our customers and we continue to promote that strongly, linking to the highest quality frame and lens products. If consumers are asking for great value it’s important to give them great value.”

This emphasis on promotion is reflected in Specsavers’ annual marketing budget, which rose a further $5 million in 2016-17 to $51 million. Such an increase is consistent with its advertising spend for the past three years, which has remained consistent at just less than 6% of total revenue.

Larsen doesn't believe the growth of Specsavers had come at the expense of competitors; instead suggesting it was a reflection of overall market growth.

“There has been a striking change to the size of the market since we opened our first stores nine years ago. Back then, in 2007, IBISWorld was telling us that the Australian prescription optical market was worth about $800 million per year, while the marketing spend for the whole industry was just $6 million,” Larsen said.

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“In 2017 the Australian prescription optics market will be worth more than $2.3 billion. The market is almost three times larger than it was 10 years ago.

Interestingly, Larsen predicts the overall market will continue to grow and said, “Consumer behaviour is evolving quickly and our profession needs to be in innovation mode if we are to keep up.

“One strong indicator is that we dearly need more optometrists – we have multiple vacancies in both metro and regional locations, as do others. We would like to see a greater supply over time.”

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