SOME CURRENT DEMOGRAPHIC TRENDS ARE GOING TO AFFECT YOU, BIGLY.

OTHERS AREN’T SO HUGE.

From economic trends and retail directions to eyecare professionals’ attitudes and buying power, our exclusive Eyecare Business Regional Trends in the Optical Marketplace analysis is designed to provide insights that will help you position your business for targeted growth in 2017—and beyond.

The good news?

A majority of ECPs in all U.S. Census Bureau regions—Midwest, West, Northeast, and South—report an uptick in sales from Q1 a year ago.

This year’s first quarter sales were buoyed by household wealth, which reached an all-time high ($94.8 trillion). According to the NRF (National Retail Federation) Monthly Economic Review for June, “Household net worth and a strong job market helped consumers’ ability to spend.”

HOW DID Q1 SALES COMPARE WITH Q1 2016 SALES?

U.S. ECONOMIC STATS:

From Sea to (Shining) Sea

EXPANSION.

“June marks the eighth consecutive year of U.S. economic expansion, the third longest in the post-World War II period. While the pace has not measured up to past expansions, there is no reason to expect it will end soon.”

—Jack Kleinhenz, Ph.D., National Retail Federation

EXPECTATIONS.

That being said, “Consumer expectations are scaling back, as the Consumer Sentiment Index fell 2.6 points in Q1—putting it at the lowest point since November 2016.”

—The University of Michigan

EMPLOYMENT.

“Since January, the unemployment rate has declined by 0.5 percentage points, and the number of unemployed has decreased by 774,000.”

—Bureau of Labor Statistics

ECONOMY.

“Growth trends continue at about 2% as tax cuts and stimulus don’t happen. Some of the temporary factors…are likely to reverse, boosting the second quarter to possibly as high as 3%.”

—The Conference Board

THE NORTHEAST

Diverse, Dense + Developed

THE NORTHEAST DISTINGUISHES ITSELF IN A LOT OF WAYS.

It’s definitely the most densely populated, developed, and diverse region in the U.S.

And, despite heavy competition, 65% of Northeastern ECPs surveyed reported Q1 2016 sales were up from a year earlier. That dropped to 52% this year. The good news, however, is that 68% of ECPs in the Northeast report a jump in year-to-year sales.

One reason may be the emphasis on high-end product, with 34% of ECPs reporting they are displaying more high-end eyewear. That’s more than practices in other regions.

Another could be the Northeast’s emphasis on lenses. ECPs here sell more PAL, digital/blue light, and Trivex lenses, as well as more plano sunwear, than ECPs in other areas.

NORTHEAST: The Optical Picture in Focus

NORTHEAST: THE BIG PICTURE

What’s the latest in business and economic news in the Northeast?

↔ JOBS. Employment rates remain relatively flat for Q1. Washington, D.C., broke all records, however, recording its lowest unemployment rate (4.5%) since the U.S. began tracking monthly job rates in 1976.

↑ COSTS. According to the Bureau of Labor Statistics, prices in the Northeast for June are up 0.1% over May and up 1.7% year-to-year.

↓ REAL ESTATE. Though retail vacancies in the Northeast dropped from 9.3% a year ago to 8.5% in Q1 this year, New Haven, CT, saw the nation’s fourth-highest increase in vacancy for the period, according to Reis.

THE WEST

Conquering Optical’s New Frontier

WHEN IT COMES TO JOBS, THE WEST MAKES THE GRADE ON BOTH ENDS OF THE EMPLOYMENT SCALE.

For the month of May, Colorado boasts the nation’s lowest unemployment rate (2.6%) and New Mexico the highest (6.7%).

Thanks, in part, to the region’s preponderance of millennials and Gen Xers, ECPs there saw sales climb more than other regions in Q1, with 70% of them reporting sales are up from Q1 2016.

To what are those strong numbers attributed? Volume. A solid 34% of practices surveyed report a single-location sales volume of $1 million to $3 million. As a result, inventory numbers are higher than other regions, with 34% of Western locations boasting a mix of 750 to 1,000 frames and 25% carrying more than 1,000.

WEST: The Optical Picture in Focus

WEST: THE BIG PICTURE

What’s the latest in business and economic news in the West?

↓ JOBS. May was the fourth month in a row that the jobless rate here continued to decrease at a monthly rate of 0.1 of a percentage point—dropping from 4.8% in Jan. to 4.4% in May.

↑ PRICES. The Bureau of Labor Statistics reports that, as of May 31, area prices were up 0.2% from the previous month and up 2.6% from a year ago.

↑ REAL ESTATE. According to Reis economists, retail vacancies increased 0.1 of a percantage point in Q2 2017 to 10%. Asking rents rose 0.4 of point, and mall vacancies rose 0.2 of a point to 8.1%. Actual rents also increased, by 0.4 of a percentage point, for Q2.

THE SOUTH

Fixin’ to Focus, from Dixie to D.C.

THOUGH FEWER SOUTHERN ECPs SAW SALES RISE LAST YEAR THAN DID PRACTICES IN OTHER REGIONS, they are registering some strong numbers this year. They are, for example, selling a higher percentage of plastic frames (70%) than their peers. And, while the ratio of frame-to-lens sales is fairly equal in other regions, Southern ECPs credit 59% of sales to frames and 41% to lenses. One reason? So far this year, practices in the South have increased their high-end frame inventory more than other regions. The same goes for extras, as 90% of ECPs there (more than any other region) report AR as their best-selling extra. The South also surpasses other regions in increased sales of both sunwear and kids’ eyewear.

SOUTH: The Optical Picture in Focus

SOUTH: THE BIG PICTURE

What’s the latest in business and economic news in the South?

↓ JOBS. All states in the region saw a decrease in jobless numbers for the 12 months ending May 31. Tennessee experienced the nation’s biggest drop for the month of May (down 0.7 of a percentage point from May 2016).

↑ COSTS. Prices in the region were unchanged from May 2016, but up 1.7% for the 12-month period ending May 31.

↓ REAL ESTATE. As with other regions, there is a decrease here of office leasing relative to the ongoing increase in jobs, meaning tenants are leasing fewer square feet per employee than a decade ago.

THE MIDWEST

Business Rising in the Breadbasket

THE MIDWEST IS SECOND ONLY TO THE WEST IN INCREASED SALES FOR Q1 2017 COMPARED WITH Q1 2016.

That’s impressive, especially considering that the region reflects more conservative attitudes than other areas of the country.

For example, 60% of Midwestern ECPs do not edge in-house, and they’re twice as likely as practitioners in other regions to add lower-priced product to their mix. They also sell a lot more combination (plastic + metal) frames, and locations tend to be smaller, with nearly a quarter of practices registering annual sales of under $200,000.

It makes sense, therefore, that they are more likely to inventory fewer frames than their peers. It’s clearly a formula that works, as sales are strong.

MIDWEST: The Optical Picture in Focus

MIDWEST: THE BIG PICTURE

What’s the latest in business and economic news in the Midwest?

↓ JOBS. The Bureau of Labor Statistics places unemployment in the Midwest at 4.0% for May—a decrease of 0.7 of a percentage point since May 2016. Ohio had the highest unemployment (4.9% in May), and North Dakota the lowest (2.5%).

↑ PRICES. Unchanged from a month earlier, the Consumer Price Index in May showed an increase of 1.4% year over year.

↑ REAL ESTATE. Mall vacancy rates have been affected by closings of major retailers like Macy’s, Sears, and JC Penney. The region’s Q1 retail vacancy rate was 12.4%, up slightly from 12.2% a year earlier.