Outlook bright for reading glasses' growth

Drug Store News, March 26, 1990

Outlook bright for reading glasses' growth

Chain drug retailers like reading glasses for some obvious reasons. They yield high margins, good turns and a steadily growing business with a minimum of selling space and upkeep. They also fit right into the health-care image drug chains like to convey.

Gross margins for the category rank among the highest of any drug store item, most merchants agree, making it easier to promote. "We're seeing margins of 50 percent to 55 percent for reading glasses, even with markdowns," said buyer Rick Stutts of Crown Drugs in Advance, N.C.

"The gross margins are excellent, even on promotion," agreed Bob Strange, a buyer for Rome, N.Y.-based Carls Drug Co.

"The margins are very good," added Gary Skelley, director of merchandising for Raley's Food and Drug located in Sacramento, Calif.

Another New York-based retailer said his chain was reaping margins of "close to 60 percent on an everyday basis" for that category.

Buyers also like the steady uptick in business that reading glasses have enjoyed over the past few years.

"We know our basic reading glass business is going up far in excess of double-digit gains," said Skelley. "We have anywhere from one spinner in the stores now to a four-foot, wall-type section, and we've been successful having them both at the pharmacy and at the camera department at the front of the store."

"Our growth rate is going up," added Stutts. "We've always carried them, but we expanded the section last year from 24 to 96 SKUs."

Reading glass sales are being pushed higher by two major forces: the aging of the huge baby boom generation, which edges more and more consumers into the right age bracket for reading glasses; and the relaxation of state regulations in recent years to allow for the sale of reading glasses over the counter. The last two legislative holdouts, New York and Rhode Island, ended restrictions on the non-prescription sale of reading glasses in 1988.

The rule change led to explosive sales of reading glasses for some drug chains in those states. Said one retailer in New York: "In our first year with a reading glass program, right after the state lifted the restrictions, our sales were tremendous. We capitalized on the rule change with promotional activity even before it took effect, and did a little over half a million at retail in our stores."

Since then, he said, sales growth has slowed as the pent-up demand eased up. Nevertheless, he said, "we're doing a tremendous business with that [reading glass spinner rack]."

Elsewhere, sales are showing steady increases as the target consumer base for reading glasses broadens to include the first waves of aging baby boomers. The boomers could push the category--now pegged at $150 million to $200 million, according to major vendors--far higher in the 1990s.

The reason: As people age, they become more susceptible to presbyopia, a condition in which the eyes begin to lose elasticity and the ability to focus sharply on up-close objects or small print.

"You have a tremendous amount of consumers entering the market," said Howard Brauner, vp-advertising and marketing for Magnivision. "Presbyopia begins to manifest itself about the age of 40, and we're trying to educate all consumers at that point to go out and get an eye exam."

"You've got two major factors at work: the aging of the population, and the growing familiarity people have about the benefits of reading glasses," noted Mike Gumnick, vp-sales with Pennsylvania Optical Co.

Fashion push

The growing consumer base is also driving the reading glass market toward the upper end of fashion and quality. Suppliers like Penn Optical have long offered fashion frames, and Magnivision is adding a new, higher-priced line called Magnivision Gold, which offers higher quality, comfort, and fashion at a $24 suggested price point.

Meanwhile, most drug chains continue to push their reading glass business with discounts and print ad promotions. Price points range at retail from about $14 to $24 on an everyday basis, but many chains boost turns with discounts and print ads.

"The business isn't going crazy, but we're seeing decent increases in volume," said Jeff La Verdiere of La Verdiere's Super Drug Stores in Waterville, Maine. "We've run quite a few promotions, and we've seen good results from that. It definitely helps."

"We discount about 10 percent every day off list, and promote it in our ads from time to time," added Strange of Carls Drug. "The takeaway at retail is a lot better when it goes on promotion."

Carls relies on a spinner rack program from Penn Optical, with vendor reps maintaining and servicing the racks "at least every two or three weeks" in higher-volume stores, said Strange.

Crown Drugs and La Verdiere's rely on Magnivision's MagniServ program for their reading glass programs. And some retailers of reading glasses rely on their sunglass vendors, who often piggyback reading glass programs onto their distribution and service networks.