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Specsavers annual sales increase by $87 million, could reach $1 billion by 2019

05/03/2018By Matthew Woodley
Specsavers Australia has recorded $947 million in annual sales for the year ending February 28, a 10.12% increase on last year’s results.

The $87 million sales increase was reflected in the additional 351,000 eye tests conducted by Specsavers over this period compared to last year, while the number of glasses dispensed rose by more than 304,000. Final totals for eye test and glasses dispensed reached 3.29 million and 4.3 million respectively.

Together with the more than 7.3 million pairs of contact lenses that were also dispensed during this period, the company was able to average slightly more than $2.92 million in sales across its 324 stores.

Similar to last year, the increased results were mostly due to organic growth – Specsavers only opened four additional locations over the past 12 months and, according to the company, the average sales per store increased by around $200,000.

The larger sales volumes have also allowed Specsavers to further invest in marketing. With 6.5% of every sale contributed to the next round of marketing, Specsavers annual marketing budget for 2018 is forecast to reach $61.5 million.


"The financial performance of the Specsavers partnership over 10 years has far outperformed our original expectations."
Peter Larsen, Optometry director of Specsavers

According to market research firm Millward Brown’s six-monthly market tracker, Specsavers holds a significant position in the Australian contact lens market, with its in-store and online sales equating to slightly less than 40% of total nationwide sales.

Specsavers also reportedly accounted for almost 40% of all eye tests conducted during this period, and slightly more than 40% of customers who bought prescription glasses.

Commenting on the results, Specsavers optometry director Mr Peter Larsen said,

“Alongside record store sales in 2017, our partners are also enjoying record profits and that makes it both an exciting and rewarding time to be a Specsavers joint venture partner – while, very importantly, our customers continue to receive better value from us than ever before.”

“Having said that, our store partners have become very accustomed to significant annual growth rates and the need to manage that growth carefully,” Larsen added.

While average sales in Specsavers stores increased by 8.5% last year, it was still slightly down on the 9.3% growth recorded in the previous 12 months. However, that didn’t stop four stores from registering more than $6 million in individual sales, a barrier that was only broken for the first time last year.

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A further 12 stores achieved more than $5 million in annual sales – two more than last year – while 37 stores managed $4 million in annual sales and 63 cracked the $3 million mark.

10 Years in Australia

The 2017-18 financial year also represented the 10th year of trading for Specsavers Australia, a milestone that wasn’t lost on Larsen.

“The financial performance of the Specsavers partnership over 10 years has far outperformed our original expectations,” he said.

“We have achieved a great deal. The coming years will see growth continue and from an eyecare perspective, ever-greater investment into producing positive health outcomes for our 3.4 million annual list of patients in Australia.”

Since its introduction to the Australian market, Specsavers has recorded 10 consecutive years of increased sales, dispensed more than 25.38 million pairs of glasses and conducted upwards of 18.76 million eye tests. Its first full year of trading resulted in a turnover of $200 million, a figure that has increased nearly five-fold in the following nine years.

Store numbers have more than doubled from the end of the first year of trading, from 150 to 324, while the number of glasses dispensed annually has risen by more than four million from the 336,000 recorded in 2008-09 – a 1,281% increase.

Should Specsavers maintain its current trajectory, it will easily surpass $1 billion in annual sales next financial year. Based on IBISWorld’s forecast for the 2018 Australian optical market reaching $3.2 billion, such a result could see Specsavers capture nearly one-third of the entire market.

Breakdown of Specsavers’ growth over the past 10 years
Breakdown of Specsavers’ growth over the past 10 years

An extended feature on Specsavers’ first 10 years in Australia can be read here.

 

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