Mass Merchants and Wholesale Clubs Turn in a Strong Performance

By


NEW YORK—It was a good year in 2019 for the mass market retailer segment of the optical business, and one that might be hard to match in 2020 as shopping in big-box stores work to overcome the fallout and impact of the coronavirus.

Still, last year’s results demonstrate the opportunity mass retailers have tapped into with their optical departments. Aggregate optical sales in the segment increased more than 8 percent to $3.79 billion, according to the VM Top 50 U.S. Optical Retailers Report. The increase was achieved even as the number of optical departments in mass merchant stores saw a very slight decline, with 5,015 operating at the end of 2019 compared with 5,026 at year’s end 2018.

Still, mass merchants and clubs with optical departments now represent just over 10 percent of the total U.S. optical retail market and bumped past 25 percent of the estimated sales of the VM Top 50 last year.

Another notable data point in the sector was the continuing growth of Target and Costco optical departments. Target had estimated optical sales of $410 million, an increase of more than 14 percent, and closed the year with 525 optical departments (plus 13). Costco posted a sales increase of just over 11 percent ($1.26 billion overall) across its 529 optical departments. Costco added 20 optical departments last year.

Two other significant developments last year were: BJ’s Wholesale bringing the operation of optical departments in-house (U.S. Vision/Refac had managed BJ’s Optical until early January 2019) and the liquidation of Midwest retailer Shopko Stores. But out of the Shopko Stores’ bankruptcy proceedings, a new optical retailer has been borne: Shopko Optical.

Backed by the investment firm Monarch Alternative Capital, Shopko Optical worked diligently to create a group of freestanding stores and finished 2019 with 81 locations, which it opened in a period of just 180 days.