(IDEX Online News) - Jewelry and watch demand remains robust in the U.S. market. New data for February 2011 indicates that total jewelry and watch sales rose by 8.3% over the same month a year ago, the largest monthly comparison in about a year.

While the post-recession economy remains choppy, consumers seem to have returned to their pre-recession shopping habits for jewelry. Current trends indicate that U.S. jewelry and watch sales could reach $66-67 billion for the full year ending December 2011, a gain of about 5-6% over 2010 sales levels.

 

Here are the jewelry and watch sales trends in the U.S. market, based on the February data:

 

·        Total jewelry and watch sales showed a substantial 8.3% gain. Industry sales were an estimated $5.6 billion for the month, up from an estimated $5.1 billion a year ago.

 

·        Total jewelry and watch sales were revised substantially upward for January to a gain of 7.2% for the month (versus January 2010). Preliminary numbers had shown a much more modest gain of 3.9%. Clearly, consumer demand for jewelry is strengthening.

 

·        During the Valentine’s selling period in February, specialty jewelers lost market share to other merchants who sell jewelry. Valentine’s retail price points with specialty jewelers have traditionally been around $99, though we saw some $79 (and lower) merchandise this year. Other merchants were selling Valentine’s jewelry at lower retail price points which appealed to consumers’ sense of value.

 

·        Watch sales rose at a faster rate than jewelry. This is a dramatic change of pace from recently monthly trends, when jewelry sales gains were outpacing watch sales gains.

 

·        The jewelry and watch industry took market share from other retail categories. This is typical in a post-recession period; jewelry demand usually falls faster at the beginning of a recession, but recovers at a greater rate than retail sales in a post-recession era.

 

·        The retail jewelry market remains bifurcated: low-priced and high-priced merchandise seems to be selling well, while goods priced in the middle - $500 to $1,000 – have experienced softer demand, though they are showing growth.  

 

The graph below summarizes jewelry and watch sales in the U.S. market over the past fifteen months. Overall, jewelry sales gains have been relatively steady during this period. Over the past three months, sales gains have accelerated, as the graph illustrates.

 

Source: US Dept of Commercce

 

Outlook Remains Solid

With a choppy global economy, natural disasters, saber-rattling in Arab countries, and other unsettling events across the world, it would seem that consumers would pull back on their discretionary luxury purchases, until the current storm blows over.

 

In fact, the exact opposite seems to be occurring, especially in the U.S. market. Most of the unsettling global events are beyond America’s shores, so the U.S. population is not directly affected. Further, jewelry can be characterized as a “comfort purchase.”

 

Longer term, we believe that jewelry sales gains will settle in at about 4% or so annually. The current annual “run rate” for jewelry and watch sales in the U.S. market indicates that total industry revenues could reach $66-67 billion in 2011, a 5-6% increase over 2010’s $63.2 billion.

 

The full analysis of U.S. jewelry and watch sales in February is available to IDEX Online Research subscribers and IDEX Online members here. Click here for more information on how to subscribe or become a member.