Time to think ahead ........................

[Chris Ryser]

Over the last 3 days gasoline prices in Canada have gone up by nearly 30% to a price that approach $ 5.00 a gallon. By the end of today prices should reach $ 1.35 per liter which translates into $ 5.40 per Gallon. In the USA, I also hear of drastic price increases in the news, and more to come.

What will that do to the economy in general and how will it affect the optical trade in the retail, wholesale and manufacturing?

Will opticians be making more sales and money? Or will opticians start to feel the economic pinch in the very near future or worse, already now.

Large cars won't sell any more..............resulting in major reduction in car sales that has already started. This is leading to more massive layoffs in the automobile asembling industry and even more so among the automotive parts industry.

People being laid off will not spend money for big ticket items unless in an emergency. Therefore more layoffs can be expected in other industries from manufacturing to retail. It will be a chain reaction.

The dental and optical sectors are usually the first to feel the downturn results. People will visit the dentist in an emergency and as well the optician in a similar case. They will make the old reading glasses make last until the arms are getting to short. They will want to repair the frame when it breaks or want to purchase a replacement that will take the old lenses.

How are Optiboard members going to react in a situation we are in already, or very soon going to be. Are opticians going on talking about the most expensive lenses, pricy high index lenses and coatings, or are they gearing up for tough times with solutions that will let them bridge over the coming tough times.

It wouild be interesting to get some comments on what everybody thinks.......if the present market situation is only a hype or should we do some smart preparing for what is coming.

[For-Life]

I notice in the case of an economic downturn the first thing to go is new frames. A lot of people do not believe in selling stuff that lasts long, but it is either you sell them new lenses for their old frame or they go to wallyworld and buy a new set. So selling good frames, keeping up with in house edging ect.


Then there is another thing. People will spend less overall, and some people will hold off, so you have to do something that will make people want to buy from you. Being differentiated is one.

During the 2001 economic downturn the drill mounts were at their height and people were willing to spend the extra buck. Since I was the first in town to have a nice selection of them they bought from us.

[SkiBunny]

During the 2001 economic downturn

Fact: there has been NO recession in Canada this decade, unlike the U.S. If you're out west like Jedi, you're in for continuing boom times for at least another year or more due to the strength in commodities especially oil & gas.

Wait until the Greenspan-induced housing bubble deflates in the US. It is said that will affect far more households far more significantly (especially those residing in many coastal states) than has any stock market fall.

But when people need glasses, especially something like first-time progressives like me, there is no choice but to buy. You have to see, or you cannot function. I speak from personal experience, as my own economic circumstances have deteriorated substantially since a year ago (except for the value of my house), yet I'm still buying the expensive glasses I need.

[For-Life]

Fact: there has been NO recession in Canada this decade, unlike the U.S. If you're out west like Jedi, you're in for continuing boom times for at least another year or more due to the strength in commodities especially oil & gas.

We there was a recession. A recession is classified as two quarter sessions without growth. We had that in Canada. Just our recession was not as severe as the US's.

[SkiBunny]

We there was a recession. A recession is classified as two quarter sessions without growth. We had that in Canada. Just our recession was not as severe as the US's.

Actually it's two consecutive quarters of negative growth... Canada overall has not experienced that since 1992-93. Our global commodity exports and in particular our dollar devaluation softened the blows of the US recession in 2001-02

[Jacqui]

This is from MSN Canada, is the same thing happening in the US??

http://sympaticomsn.ctv.ca/servlet/A...hub=topstories

[Optical_1]

Well, I think you have a point. I think the thing to do is what I always try to do, which is buy low sell high. The point that I am trying to make is that in my opinion, the key to doing well in this business in good time or bad is directly related in how we buy products. One of the most important aspects of owning a small business is buying wholesale quality products at a low price. So, I think small business owners and their employee's should start thinking about lower priced frames, as well as lenses. I think that this could have a positive effect on the business in the long run, because people will become more conscience of what stuff costs and how much profit is being made from a paticular product, because in the end it's not the gross that counts.....it's the net.

[Jacqui]

Chris, isn't CR39 and other plastic lens materials at least partly made from petroleum products?? If it is we could see higher and higher lens prices too.

[coda]

Chris, isn't CR39 and other plastic lens materials at least partly made from petroleum products?? If it is we could see higher and higher lens prices too.

All plastic lenses are made from petroleum derived materials. However the major cost here is not the raw material (oil) but the processing the raw materials must undergo on the way to becomming first the monomers and finally the lenses. I'd be surprised if higher lens prices resulted from an increase in cost of the raw constituents.

Of course energy and transportation costs will (may) go up and that will increase the effective cost of the product (i.e. what you pay for them).

[Happylady]

People will still buy glasses, but they will buy them less often, and less expensive ones. If they don't have insurance they will go to places like Wal-mart and Costco. They will reuse their frames. They will order their contacts on the internet.

[jtart2]

The way I see it, these things have been going on for the past 5 years already. People are hesitant to buy new pricy items and they already surf the internet to buy as much as possible.

It's not like this is some kind of "Great Depression"

More time/research will be spent on ways to use alternate energy sources and everything will be OK again. We knew the "gas was going to run out" someday. I don't understand why everyone is freaking out about it.

For the past 50 years gas has been exteremely cheap (if you compare it to other goods i.e. bottled water, sodas, etc)

I remember when 12 Oz sodas were $0.25 in the mid '70's. Now they are $1.29 for a 20 oz. That's a pretty big jump. However gas in the seventies, that I remember was about a dollar. I can't believe we are just now paying $3.00/gallon. It sounds about right if you asks me.

[Johns]

During the depression, my aunt was a haridresser. She was ALWAYS busy. Her clients found a way to get the money to have their hair done. The folks that are not willing to pay for quality have already found WalMart. If those willing to pay for quality are affected by the changing economy, I can relax my prices a bit and not feel it that bad.

(I believe)The best time to start a business is in a downturn. (I've done it twice.) After the recession it, your company is usually operating w/ the least amount of excess spending you'll ever have. The fat has already been trimmed. It's the businesses that take on a lot of debt in the good times that will really suffer.

[Chris Ryser]

People will still buy glasses, but they will buy them less often, and less expensive ones. If they don't have insurance they will go to places like Wal-mart and Costco. They will reuse their frames. They will order their contacts on the internet.

That was a very good statement........................but where does it help you?
Do tou want to loose your business or your job?

What are you ready to do so that what you said above does not happen?

[Chris Ryser]

Chris, isn't CR39 and other plastic lens materials at least partly made from petroleum products?? If it is we could see higher and higher lens prices too.

Yes Jaqui, a lot of chemicals are derived from oil......................in this case there is another factor.

I made a calucaltion once figuring out that you could make about 34,000 lenses with a 45 gallon drum of CR39

So I don't really think that even a good price increase would a ffect the price of a single lens very much.

[Jim]

People have to buy something.
Humans are basically hunter/gatherers. It is in the genes. People have to hunt, we can't help ourselves.
In the modern world we shop. That is how we hunt today.
We have basic psychological needs that fall just below our animal needs for food, shelter, procreation, safety, survival etc.. Some psychological needs that follow close behind the basics are sense of community, love, self worth, discovery, enjoyment, and of course, hunting and gathering.
Shopping is how we satisfy our basic need to hunt and gather.
No matter how bad the economy gets, people have to buy something.
A lot of items will become taboo, like big screen digital TV's, gas hog autos, new furniture, and such. But we have to buy something.
We can't help ourselves.
We will satisfy our need to hunt via trinkets found at the Wal-Mart or Dollar Store. Or we'll buy important, justifiable, non frill items that will satisfy our basic need.
We will buy stuff that psychologically aides our basic needs for shelter, safety, and survival. We all got needs.
To survive we must be healthy. We will still go to the Doctor.
We must have shelter. We will pay our mortgages or rent.
We must eat. We will still buy food.
We must see well. We will take care of our eyes.
Therefore eye glass sales sold by health care folks will improve, chain stores maybe not so much. Glasses must look like, smell like and taste like a medical device, not just a product or "good deal"
We got to buy something. We will justify eye glasses as a necessity of life.
Industry wide, units sold may drop because of the chain store decline, but stand alone and Doctors should do well in a poor economy.

Optimistically speaking

Disclaimer: Past performance may not predict future trends.

[Chris Ryser]

1 pm September 2nd/05 it was announced on the news that gasoline has reached a new price of $ 1.50 per liter which equals $ 6.00 per gallon in the Montreal area.

In the upstate New York area (Plattsburg) the price went to $ 2.99.

So far we did not have many comments on expected results to the economy in general and how it will affect the optical trade. For sure some of you optiboard members must have some thoughts on it and some positive input to give.

I know it is Friday before Labour Day and many have gone for the last warm weekend of the summer.

[Jacqui]

This is already hurting our business. We're in a primarily agriculural area and the farmers here are already feeling the crunch. I just hope the prices go down before harvest time or we're in trouble.

Forgot to tell everyone, I bought gas here this AM for 3.06, some stations are 3.39. Heating oil is around 3.00 gal.

[SkiBunny]

So far we did not have many comments on expected results to the economy in general and how it will affect the optical trade.

I just traded in my brand new Rodenstocks for half a tank of gas :bbg:

Seriously, as a consumer I would buy good glasses as a priority even it meant taking public transit to work for a bit instead of driving to make up for it