Our early indicators showed that U.S. shopping mall traffic began to pick up in September. Now that the sales numbers are available, it is clear that consumers were not just browsing, they were actually buying goods!

Total jewelry sales in the U.S. market were up in both September and October. Specialty jewelers’ sales are about flat with last year, after sharp declines in prior months during 2009. Even total retail sales – in all categories – are showing improvement.

 

·        Total U.S. Jewelry Sales in October: +3.1 percent

·        Total U.S. Specialty Jewelers’ Sales in October -0.6 percent

 

The graph below illustrates monthly sales trends for the total jewelry industry (jewelry and watches), as well as for specialty jewelers.

 

Source: Dept of Commerce

 

What event triggered this dramatic change in consumer spending, especially for jewelry? We are still too close to the numbers to get a clear view – we may not know what caused this shift in consumer attitude for several months. But here are some possible explanations.

 

·        Sales comparisons have gotten easy. While November and December 2008 sales showed the worst comparisons, sales in early 2008 showed weakness. Thus, due to a “trick of the math,” percentage sales comparisons have turned positive, even if dollar sales have not recovered to pre-recession run rates.

 

·        The U.S. economic recovery apparently began sometime in the third quarter. The U.S. government and the Federal Reserve put their resources to work early last year against the recession, much sooner than any other nation. Further, the U.S. economy is much more resilient than most people understand. Finally, the Fed, which has been in charge of generating economic growth, is very, very good at what they do. We would never bet against the Fed (even if they are not perfect).

 

·        American consumers have simply gotten tired of the recession. They have gotten tired of negative news. Culturally, Americans are born to spend.  There’s an old adage: “when the going gets tough, the tough go shopping.”

 

·        Americans feel wealthier: the stock market has shown a recovery from the depths of March 2009, and real estate values have stopped falling.

 

·        While most economists are predicting that unemployment will continue to rise into 2010, some localities are reporting that jobs are being created and unemployment is falling.

 

Watch Sales Rebounding Faster Than Jewelry

After falling further and faster than jewelry sales, watch sales in the U.S. market are posting a rapid come-back. In both September and October, watch sales showed stronger gains than jewelry sales, as the graph below illustrates.

 

Source: Dept of Commerce

 

Retail Sales Showing A Recovery

Virtually all categories of retail sales are showing a recovery from the depths of the first quarter of 2009. While total retail sales (ex-auto and food) are not yet showing positive comparisons versus the same month a year ago, the trend is clearly positive. The graph below summarizes U.S. retail sales, ex-auto and food, versus U.S. jewelry and watch sales for 2009.

 

Source: Dept of Commerce

 

Monthly Jewelry Sales Trends

The following table summarizes monthly sales trends for specialty jewelers and total jewelry industry sales. We have included sales trends for 2007, 2008, and year-to-date 2009. Our forecast calls for 2009 sales in November and December to be above the prior year’s dismal levels, but still well below the dollar volume of 2007.

 

Source: Dept of Commerce