If the right balance is achieved, moderate economic growth is still expected for the remainder of 2022 and both inflation and interest rates are expected to peak towards the end of this year. Wages growth is also predicted to increase early in 2023.
As with previous ProVision advice, we encourage you to make considered decisions around spend and maintain a cash reserve to help you navigate future unknowns. It’s still uncertain times but we are all more adept than ever at pivoting and adapting where needed with good preparation.
The only constant has been change, and ProVision is committed to helping our members navigate future challenges and changes, whether that be through business coaching or resilience training or fatigue management. Covid has left a footprint on all of us, but there is still much opportunity ahead of us to optimise independent optometry’s place in the market.
2022
Fast forward one year and large scale lockdowns are a thing of the past, pent up consumer demand has boosted services consumption, and the economic outlook has swung like a pendulum as various measures are being implemented to control inflation (resulting in a dampening of consumer confidence once again).
What a difference one year makes! This time twelve months ago both Victoria and NSW were still experiencing prolonged lockdowns, and the road to economic recovery was being touted as uncertain and bumpy (at least initially). Fiscal support was still available and the Government rhetoric was all about households and businesses adapting to ‘living with Covid’.
According to CBA research, the economy has entered contractionary territory and consumer confidence is beginning to taper off. The challenge for the RBA now is to facilitate a ‘soft landing’ and with Australia in a better situation than many other countries (lower inflation rates and much lower Government debt), measured stimulus reduction could achieve the desired effect with minimal harm.
CEO News, September
Macro-Economic Outlook
Hello and welcome to the September issue of CEO news
Take the time to re acquaint yourself with all that ProVision offers in terms of services and support, and please lean into all things that can help strengthen your practice for future success. That’s why we’re here, after all!
2022
CEO News, September
August Results
After the first two months of FY23, members are up by 25.1% (this is coming off an extremely low base last year in key states). Pleasing to see WA recording positive growth without any lockdown impact, whilst the Queensland decline could be partly attributed to the strong performance being seen same time last year. September is expected to reflect the performance of the previous two months, albeit at a softer growth rate relative to last year’s improving outlook.
The collective moving annual total purchases depicted in the following chart largely reflects stronger member trading over the past quarter, but the outlook for the period ahead is expected to be driven by the impact of both inflationary pressures and related consumer confidence.
August%Growth YTD Growth% VIC 47.8% 28.1% NSW 118.6% 68.7% QLD 11.6% -1.7% SA 9.8% 13.6% WA 3.3% 2.9% TAS 19.9% 15.1% NATIONAL 42.4% 25.0%
Purchases have been trending upwards on prior year for the past four months after having declined for almost ten months in succession from July 2021 to May 2022
In line with the macro economic trends above, August numbers reflect ongoing consumer confidence with a 42% like for like lift against the same month last year (admittedly this result was partly due to the anniversary of last year’s lockdowns in key states across both July and August).
Some minor changes have been made to the program due to extenuating circumstances, and the latest and most up to date brochure can be viewed by clicking below.
Australia will hold a National Day of Mourning to observe Her Majesty Queen Elizabeth II on Thursday 22 September 2022. The day will be recognized as a public holiday nationally but not as a restricted trade day which means retailers are able to trade as normal. The Fair Work link below outlines the National Day of Mourning guidelines for each state to assist with practice planning.
2022
National Holiday
Conference Countdown!
Registration numbers continue to climb but if you are intending to register and have not yet done so, please visit optom.provision.com.au/conference. Here, you will also find the latest details on conference workshops and networking events.
CEO News, September
With just over five short weeks until our National Conference in Melbourne, the ProVision office is a hive of activity. The opportunity to network with peers, be exposed to world class speakers, and take new business ideas back to practice is one that our members have come to value highly. And after three years of absence we look forward to sharing a stimulating few days with you all.
View Conference Program >
National Optical Care, The Optical Company and George & Matilda all remain active in the consolidation space as they continue to meet their acquisition targets to appease investor goals. Once they reach their critical mass target in terms of practice numbers there will inevitably be a trade sale or a public listing neither of which is in the best interests of the independent sector.
Please note the ProVision support office will be closed on this day, as well as Friday 23 September to observe the AFL Grand Final public holiday.
We urge you to do your due diligence around any decision regarding the potential sale of a practice, to ensure the decision is in your best interests (that is to say, will your overall financial return be better than remaining independent, will you retain the freedom to make your own choices, and will you feel proud of your practice legacy?)
The independent market is seeing some current uplift, particularly in major cities and regional areas that have experienced growth. We are seeing a mix of current practice owners looking to expand their network as well as younger optometrists looking to either jump into ownership or partnership, so a practice sale to a consolidator is certainly not your sole option.
As always, ProVision is here to support you and provide confidential guidance in terms of succession planning so don’t hesitate to reach out to us. For more considerations around potential sale of practice to consolidators please click below.
CEO News, September
Consolidator Update >
New Team Members
Recall Focus
As with many organisations of late, ProVision has seen some recent resignations in line with low unemployment rates and a highly competitive labour market. Just like practice resignations, this can be seen as a cause for concern or an opportunity to refresh an existing team with new thinking and an injection of energy. The ProVision Support Office has been pleased to welcome new talent into the business over the past two months, who have contributed new ideas and skills that ultimately benefit all of our practices. A short profile of each new team member is featured below for your reference, but you’ll also have the opportunity to meet them all in person at our upcoming Conference!
2022
Click here for Fair Work Guidance >
Consolidator Activity
One of the residual effects of covid trading restrictions two years ago was a slowing down of appointment bookings in some states. Counteracting this impact requires a renewed focus on patient recalls, be that via SMS, mail or phone. The disruption of covid lockdowns sees many patients out of routine with their health providers, so be proactive in reaching out to patients should you be noticing a notable decline in bookings of late.
Adrian Hunt – Finance Manager
CEO News, September 2022
Michelle Grosser Senior Local Area Marketing Specialist
Michelle is a seasoned design and marketing professional, with around 20 years of advertising & marketing experience. She has most recently worked for The Stubby Club as Ecommerce Marketing Specialist, Digital Marketing Specialist at Iconic Digital in the Hunter Valley, Ecommerce & Marketing Manager at Rapid Clean Newcastle, and Marketing & Promotions Manager for Hunter Hotel Group. During this time Michelle organised and implemented traditional and digital marketing campaigns for a multitude of businesses. Her wide, hands on marketing experience will be highly valued by Members seeking bespoke strategy advice and marketing support
Leanne has a genuine passion for leading by example to develop teams and achieve optimum engagement. Leanne has a strong focus on using inspiration to achieve greatness, as well as embracing collaborative communication and a hands on approach.
Adrian lives with his wife Kylie, and when he is not working he enjoys catching up with family and friends, travelling and cheering on his beloved Essendon Bombers.
Leanne officially commenced with the team in August as the ProVision People & Culture Manager.
Adrian is a Certified Practising Accountant with over 20 years’ finance experience. Adrian started his professional career in 2000 with Harmon Partners Chartered Accountants, working primarily in Audit during his time there. In 2012, Adrian made the transition into industry when he took on a finance role with Homemakers Furniture & Bedding, which is an independent Furniture & Bedding buying Group.
Leanne Jackson People & Culture Manager
A certified Australian Human Resource Institute member for more than 13 years complemented by more than 20 years of experience in HR and Leadership roles at the National level Leanne has demonstrated success in both blue and white collar environments. We look forward to Leanne helping ProVision achieve operational and strategic goals at all levels.
Richard has joined us to spearhead the EyeCarePro service. Richard has worked in various roles including Marketing Manager for Supps 247, Marketing and Social Media Officer for Parker Healthcare, Design and Marketing Freelancing, as well as Client Relationship Manager for a digital specialist company, Pink Zebra.
Retail Pricing Strategy (frame tariff revocation impact)
Warm regards,
Tony Jones ProVision Merchandise Manager / Acting CEO
Almost all of ProVision’s frame supplier partners will be impacted by the recent revocation of the 5% tariff reduction that has been in place for almost 20 years. Generally speaking, any distributor importing frames into Australia from any country that does not have a Free Trade Agreement will incur the new
Thistariff.5%
CEO News, September 2022
If you would like additional information about any of the topics covered in today’s newsletter, please address your questions to tjones@provision.com.au. An appropriate subject matter expert will respond as quickly as possible.
Richard is a delightful young professional who is in his element when working with people. He is passionate about the health and wellness space and is very excited by this fresh challenge.
Richard Son – Senior Digital Marketing Specialist
increase in costs will inevitably be passed on by local distributors due to the already existing pressures being felt over the past eighteen months (e.g. cost of raw material costs, Chinese labour cost increases, freight costs up by 80% etc). The only exceptions would be those that warehouse stock in China, or those that centrally ship out of China (which is very few), as Australia has a Free Trade Agreement with China.
Consider how you respond to any increase in frame prices by reviewing your overall product pricing strategy. Carrying the frame cost increase through to the retail price of the frame is not the only way to recoup this cost you may want to look at absorbing the increase through a lens pricing review as an alternative strategy, as patients may be more sensitive to frame pricing than lens pricing. Remember that pricing is one business driver that you can control, so approach it wisely and review your strategy periodically to ensure profit optimisation.
Whilst there is an industry appeal under way to reverse the decision, you may find that some frame suppliers will pass the 5% on immediately or in the months ahead, especially as many have held prices steady for extended periods of time.