U.S. Jewelry Sales Post Solid Gain in JanuaryMarch 21, 17
Sales of fine jewelry and fine watches rose by 6.8 percent in the U.S. market in January 2017, when compared to the same month a year ago, as the graph below illustrates. Sales were an estimated $5.2 billion, according to preliminary data from the U.S. Commerce Department. This was the fifth consecutive monthly gain that was well above more modest gains reported during the early months of 2016.
Specialty Jewelers Lose Market Share in January
After weak sales in early 2016, specialty jewelers in the American market posted strong sales in the all-important 2016 holiday selling season of November and December, and they took market share from multi-line retailers who also sell jewelry. However, in January, specialty jewelers’ sales gains were much more modest, and they lost market share to competing multi-line retailers. Specialty jewelers generated a 4.1 percent sales gain in January, while other multi-line merchants who sell jewelry generated an estimated 8.4 percent sales gain year-over-year, as the graph below illustrates.
The graph below summarizes sales trends for specialty jewelers since the beginning of 2016. For American jewelers, demand is highly elastic. Their sales gains have not been as consistent as sales trends for the total jewelry market, including sales at all retailers who sell jewelry.
Specialty Jewelers Losing Market Share Even in Key Selling Periods
Historically, specialty jewelers have posted solid sales gains during the three key selling seasons during the year: Valentine’s, Mother’s Day, and Christmas / Holiday. During other months, multi-line retailers capture impulse sales for jewelry: when shoppers are browsing those big-box stores, they often find something special in the jewelry department. Even Walmart has recognized this, and moved its jewelry department close to the front of the store.
However, in 2016, specialty jewelers took market share in only two of the three key selling periods: Valentine’s (February and March), and holiday (November and December). In all other months, including Mother’s Day (May) which is becoming less important for jewelry sales, specialty jewelers (red bars) lost market share to multi-line merchants (blue bars). The graph below summarizes the disparity between specialty jewelers’ sales gains and jewelry sales trends for all other retail merchants who sell jewelry.
Fine Watch Sales Slightly Stronger than Fine Jewelry Sales
By category, fine jewelry sales were up about 6.6 percent in January, and fine watch sales rose by 7.6 percent. Watch sales had been lagging jewelry sales for a number of months earlier in 2016, but demand for watches picked up at the end of last summer, according to both the government survey and our panel of jewelers.
Consumer Demand Stable
Total retail sales of all goods, except autos, posted a solid 5.6 percent sales gain in January, the third consecutive month of solid sales gains. This means consumer demand appears to have stabilized and perhaps strengthened, with retail sales gains trending higher. The good news: jewelry took share of wallet from other consumer goods in January, as it has since July 2016. The graph below illustrates sales trends for all retail sales (green bars) versus sales gains for jewelry (red bars).
Data Revisions Modest
The Commerce Department revises its preliminary numbers for about three months following initial reports; it also makes annual revisions which are often quite large.
During January, the Commerce Department “smoothed” total November and December 2016 sales to a gain of 6.8 percent in November (previous 7.5 percent gain) and a 6.3 percent gain in December (previous 5.5 percent gain).
Specialty jewelers’ sales gains were trimmed: revised data shows that November 2016 sales gains were 12.2 percent (previous 13.8 percent) and December 2016 sales gains were 6.7 percent (previous 6.9 percent).
For the year, revised data showed little change in total U.S. fine jewelry and fine watch sales: about $80.9 billion, up 4.8 percent (unchanged from preliminary data). Total fine jewelry and watch sales for the 2016 Holiday Selling Season (November-December) were up 6.4 percent, based on revised data (unchanged from prior reports).
Outlook Optimistic for 2017 Jewelry Sales
While chain jewelers have been reporting generally soft sales for the most recent fiscal quarter ended January 2017, independent jewelers have generally been reporting stronger sales gains.
Our preliminary forecast for jewelry sales gains in the U.S. market for 2017 is a gain in the four percent range, year-over-year.