U.S. Holiday Sales Forecast: +2.3%, Diamonds +2%

(IDEX Online News) - Most holiday sales forecasts predict a modestly better season in the U.S. than last year. Total sales are expected to rise 2.3 percent to $447.1 billion with jewelry sales to increase by 3 percent at most. Diamond jewelry sales alone are predicted to go up by no more than 2 percent.

As in previous years, retailers are expected to focus on supply chain efficiencies and inventory control to limit their exposure to excess inventories and unplanned markdowns, according to the National Retail Federation.

The NRF’s 2.3 percent forecast is slightly lower than the ten-year average increase of 2.5 percent, but is still an improvement from last year’s 0.4 percent uptick and the 3.9 percent decline retailers suffered from in 2008.

The preliminary IDEX Online holiday sales forecast for the U.S. market calls for jewelry sales to be in line with total sales, and up to 3 percent at most. Diamond jewelry sales, as indicated by jewelers’ resistance to pay more for diamonds, are forecasted to increase by no more than 2 percent, according to IDEX Online analyst Ken Gassman.

NRF Chief Economist Jack Kleinhenz agrees that price is an issue. “While consumers have shown they are once again willing to spend on what’s important to them, they will still be very conscientious about price,” he said.

As a counter measure, Kleinhenz expects retailers are to compensate for this “fundamental shift in shopper mentality,” as he calls it, by offering significant promotions and emphasizing value in their marketing efforts.

While promotions are a common practice, diamond producers such as De Beers are encouraging retailers to emphasize the ‘few for more’ approach, a concept that says that people would prefer buying fewer items, but with higher value.