Staff Standpoint | December 2014 Hearing Review
The hearing aid industry will top 3 million units in 2014. Here is a review of projected 2014 hearing aid sales and a perspective on what the growth of Costco represents for the overall hearing healthcare market.By Karl Strom, editor-in-chief
Third-quarter US hearing aid sales continued to be robust, according to statistics compiled by the Hearing Industries Association (HIA), Washington, DC (Figure 1). Total net unit sales of hearing aids increased by 5.9% in the third quarter (Q3 2014 vs Q3 2013)—surprisingly strong results considering that the third-quarter sales percentage base in 2013 was also quite high (8.7%). And it was all-around market growth: Third-quarter sales in the private/commercial sector (non-VA sales) increased by 4.0%, while dispensing activity at the Department of Veterans Affairs increased by 13.1%. Although it is anyone’s guess what the fourth quarter will bring, it looks as though sales growth for the private sector will be about 3% higher than last year, and about 9% higher for the VA—between 3% and 3.5% overall.
A bumpy road predicted for 2015. However, the good news in the HIA report is tempered by recent Hearing Review survey statistics (see April 2014 issue) suggesting flat-to-declining average sales prices (ASPs), which has intensified in 2014 due to aggressive price competition between manufacturers. Finally, when factoring in Big Box sales, private practice dispensing offices are almost certainly not benefiting much from the 3% commercial growth figure. Costco’s annual units have been growing at an average of 20-25% in recent years, while other Big Box and Internet outlets may also play into the overall picture (although a few notable hearing aid manufacturers in this segment do not report sales to the HIA). Figure 2 represents Hearing Review’s best-guess relative to the actual “private sector” sales once Costco is accounted for. What emerges is a flatter growth curve for private-sector practices. In my view, all three of these markets should be showing robust growth—one of the reasons this magazine devoted a lot of pages to business growth and differentiation, efficiency, and other strategies during 2014, and will continue to do so in 2015.
As the proverbial blessing/curse states, “May you live in interesting times.” We definitely do. But, among all the turmoil, there are abundant opportunities in hearing healthcare (eg, see the Taylor et al article on p 14). There are certainly challenges ahead, but hearing healthcare remains an excellent, dynamic, growth market.
Happy Holidays. As 2014 comes to a close, the staff of The Hearing Review thanks our readers, advertisers, and authors for their fantastic support and feedback. We wish you the very best of the Holiday Season.