Company updates & acquisitions

Specsavers 10 years on: Still changing the face of optometry

In the 10 years since opening its first Australian store, Specsavers has grown into the country’s largest optical chain, with annual revenues approaching $1 billion.The speed of this transformation has left an indelible mark on our optometric sector and even surprised Specsavers co-founder Doug Perkins, who rbers a time when the local support team comprised of just four mbers based out of an office in Port Melbourne.“Our mission in those first few years was to ‘change the face of optometry’ and 10 years on it is rarkable to see the results,” Perkins says.{{quote-A:R-W:450-I:2-Q: We have a lofty but attainable goal – to transform eye health in Australia, New Zealand and beyond. -WHO:Doug Perkins, Co-founder of Specsavers}}“Specsavers is at its very core a partnership, and the unstinting hard work of Specsavers store partners in every state and territory, every town and local community has made possible the success to date.“We could never have imagined the pace and scale of growth that our store partners have sustained.”While some companies prefer to enter new markets by just dipping their toe in to feel the water, Specsavers made a splash. In what could possibly be the fastest practice rollout ever seen in Australia, the company opened 100 stores in its first 100 days, and ended the year with 150 locations nationwide.The first 100 stores were comprised of independent practices that were converted, at the cost of around $200,000 each, with Specsavers branding, products, systs and marketing. In the ensuing nine years, an additional 224 stores have opened, mostly on ‘greenfield’ sites that have been specifically developed from the ground up.{{image3-a:r-w:400}}During this time, both Doug and his wife Mary were personally involved with the entry into the Australian and New Zealand markets. Mary would regularly travel halfway around the world between the UK and Australia, while Doug based himself permanently in Port Melbourne from 2007–12 to oversee the expansion.“It ses quite extraordinary that 10 years have passed since we opened the first Specsavers practices in Australia,” Perkins says while conceding he could not have imagined the subsequent pace and scale of the growth that followed.“Along the way we have grown our network to 324 joint venture partnership practices and propelled hundreds of optometrists and dispensers into business for thselves, most for the first time.”It’s difficult to quantify the effect this has had on the optometric landscape in Australia, but there are some key metrics that indicate just how much of a disruptive force Specsavers has been on the market.Since its arrival on Australian shores, market researcher IBISWorld estimates the optical market has more than trebled, from slightly less than $900 million in 2007 to a forecast $3.2 billion in 2018. However, while the market has grown, so has Specsavers’ position in it.From a base of zero at the end of 2007, it’s believed Specsavers now controls approximately 40% of the market – over the previous 12 months, it has facilitated almost 40% of all eye tests performed in Australia (3,297,247), dispensed more than 40% of all prescription glasses (4,306,000 pairs), and prescribed slightly less than 40% of contact lenses (7,326,212 pairs).{{image4-a:r-w:200}}{{image5-a:r-w:200}}The growth in sales and market share can in part be attributed to Specsavers’ investment in marketing, which heralded another dramatic shift in the way optometry was performed and promoted in Australia.In 2006, the Access Economics Optometry Report found total marketing spend for the entire optometry market was $6 million. Three years later, and one year after the initial rollout, Specsavers doubled that figure with a preliminary $12 million investment to solidify and expand its foothold.It now spends more than $50 million annually on marketing and promotions, with 6.5% of every sale invested by Specsavers franchise partners into the next round of marketing. Such dominance has led to concern, especially from independent optometrists, about the future of the sector in Australia, but Perkins, predictably, sees it from a different perspective.“The dand for clinical service is at all-time high and graduate optometrists are now the most highly paid graduates in Australia, pointing to significant undersupply. In 2008 Australians were typically returning for an eye test every five years – in Specsavers stores we know that is now every 2.2 years,” he says.{{image6-a:r-w:400}}“The average price of a pair of glasses has rained almost 50% lower than 2007 prices, the optometry market has trebled in size and Australians have more choice and better value than ever before.”Crucially, it does not look like Specsavers will be slowing down in Australia any time soon. Over the past five years, Specsavers has averaged 17.07% annual growth, culminating in $947 million in revenue over the past 12 months and putting it within reach of the $1 billion mark.So, given the success of Specsavers during its first decade in Australia, the only question that rains is – ‘what about the next 10 years?’According to Perkins, the answer is simple.“We have a lofty but attainable goal – to transform eye health in Australia, New Zealand and beyond.”Whatever form that transformation takes, based on previous history it will likely happen quickly.

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