U.S. jewelry sales momentum slowed
By Ken Gassman for IDEXOnline.com
U.S. jewelry sales momentum slowed in the month of June and in the second calendar quarter of 2010, based on new data from the U.S. Department of Commerce.
Year-over-year changes in U.S. jewelry and watch sales for the 15-month period from April 2009 through June 2010, according to U.S. Department of Commerce statistics.
In June, total jewelry sales rose 6.1 percent, the smallest monthly gain recorded so far in 2010. For the second quarter, U.S. jewelry sales were up 7 percent, somewhat below the first quarter's more robust 9.7 percent increase. Specialty jeweler's sales for June were disappointing: Sales rose by only 3.1 percent.
In the opinion of IDEX Online Research, there are two reasons for the slowing sales momentum, as follows:
- Consumer spending for all retail categories has moderated, despite reasonably stable personal balance sheets. Apparently, the economic recovery has not been strong enough to embolden consumers to open their wallets and resume spending at a faster pace. This will change as unemployment falls, home values recover and the stock market feels more solid.
- Comparisons against last year are becoming generally more difficult. This is a mathematical function, and will be an even greater factor dampening sales comparisons over the next 12 months.
Further, there is no major event driving demand for jewelry between Mother's Day in May and the upcoming holiday selling season in November and December; June is the beginning of the three-month period dubbed the "summer doldrums." Our sense is that jewelers have not been marketing heavily, so jewelry has slipped from its top-of-mind position.
In addition, with no generic diamond advertising, diamond sales appear to have been negatively affected more than other categories.
Finally, unit sales appear to be holding up more or less, but the average ticket is lower as shoppers opt for low-pricedfashion jewelry and beads.
The graph at the top of this page summarizes total jewelry sales trends for the past 15 months in the U.S. market.
Outlook: A brighter fourth quarter
It is highly likely that jewelry sales will continue to lag somewhat over the next few months. Sales trends in a recovery period are often choppy. However, IDEX Online Research continues to believe that by the fourth quarter, consumers will be tired of the recession, and will likely open their wallets, perhaps not at historic fourth quarter levels, but at a pace stronger than today's demand momentum.
This story first appeared on IDEXOnline.com on Aug. 30, 2010.
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