Jewelry sales in the U.S. market in 2007 were about $64.8 billion, up 4.3 percent from the prior year, according to preliminary data released by the U.S. government on Friday. U.S. jewelry consumption by value represents about half of global jewelry consumption, estimated at $130-135 billion annually. Total jewelry sales in the U.S. market include sales made at specialty jewelers as well as non-traditional outlets for jewelry such as discounters, mass marketers, and other specialty retailers.

 

For the month of December, which represents about 23 percent of annual jewelry revenues in the U.S., total jewelry sales rose by 3.0 percent.  

 

Further, revised data shows that total jewelry sales for October and November rose 4-5 percent for each month, significantly lower than prior estimates in the +7-8 percent range.

 

For the combined November-December holiday selling season, preliminary figures indicate that total U.S. jewelry sales were up by about 3.4 percent. This was slightly higher than the forecast by IDEX Online Research.

 

In the past, these preliminary sales figures have been revised significantly – usually downward; revisions will be published monthly, with final results to be reported in mid-Summer 2008. Further, jewelry sales by specialty jewelers for the full year of 2007 will be reported mid-February.

 

Revenue Gains Boosted by Price Inflation

While many jewelers might dispute the strong sales gains of both fourth quarter and full year numbers as reported by the government, it is important to remember that inflation was rampant in the jewelry industry in 2007. For the full year, jewelry price inflation was up 4.9 percent; in the final quarter of the year, it was up more than 4.5 percent. Thus, unit sales of jewelry fell modestly both in the fourth quarter and for the full year, but total sales as measured in dollars were up, reflecting the impact of inflation. In nine of the past twelve years, retail jewelry prices have reflected deflation; thus, 2007 was an unusual year for U.S. jewelers in terms of price inflation.

 

December Sales Trends Moderate

Most jewelers reported that their December sales gains were more modest than their November sales increases. The government numbers reflect this trend. The graph below summarizes total jewelry sales in the U.S. market by month for 2007. Total jewelry sales include sales made by specialty jewelers (about half of the reported $64.8 billion) as well as other retailers such as Wal-Mart, Kohl’s, Sears, J.C. Penney and others who sell jewelry.

 

U.S. Jewelry Sales - 2007 Percent Change Year-over-Year Source: US Dept. of Commerce and NIPA

 

It is important to note that the government’s numbers for both October and November were revised significantly downward. Preliminary reports indicated that October sales were up by 6.8 percent while November’s sales surged by 7.8 percent. The newly revised numbers indicate a gain of 4.8 percent for October, a decline of 200 basis points from preliminary results.

 

For November, newly revised numbers indicate a more modest gain of 4.3 percent, a decline of 350 basis points from preliminary numbers. Thus, it is possible that December’s preliminary sales gain could be revised downward – perhaps significantly. As noted above, final numbers will be reported mid-2008, with revisions issued monthly for the next several months.

 

Full Year Jewelry Sales Advance by 4.3 percent

Total jewelry sales in the U.S. market for 2007 were up by 4.3 percent to $64.8 billion. This was somewhat higher than the forecast by IDEX Online Research, though it is likely that full year numbers will be revised, likely downward.

 

The graph below summarizes annual jewelry sales in the U.S. market, based on preliminary numbers. Jewelry sales at all retailers, including specialty jewelers, mass marketers, specialty retailers, and others are included in these figures. 

 

U.S. Jewelry Sales Percent Change Year-over-Year Source: US Dept. of Commerce and NIPA

The following graph summarizes annual total jewelry sales for the U.S. market for the past 16 years.

 

U.S. Jewelry Sales $ Billions Source: US Dept. of Commerce

Specialty Jewelers’ Number to Be Reported Mid-February

Jewelry sales by specialty jewelers – expected to be about $32 billion – will be reported in mid-February.