Specialty jewelers’ December 2009 sales were up just over 14 percent, according to new data released by the U.S. Department of Commerce. This information confirms all of the early preliminary signs pointing to a solid 2009 holiday selling season for most U.S. jewelers. While the government data is subject to revision, we believe the overall trends won’t change.

 

Here are the highlights of 2009 December sales, holiday retail sales, and full year 2009 sales for specialty jewelers:

 

·        Specialty jewelers’ December sales rose by 14.3 percent to $5.7 billion. In December 2008, specialty jewelers’ sales were $5.0 billion, a decline of 21.9 percent from December 2007’s $6.4 billion. Thus, while specialty jewelers’ sales were up in December 2009, they have not recovered to prior levels of recent years.

 

·        Specialty jewelers’ November and December sales – the all-important holiday selling period – rose by 12.2 percent to $8.1 billion. In the 2008 holiday selling period, specialty jewelers’ sales were $7.2 billion, down 20.7 percent from the 2007 holiday selling period’s $9.1 billion.

 

·        Holiday sales represented about 30 percent of the typical specialty jeweler’s annual sales in 2009. This is up from 2008’s 25 percent, but below the average for prior years of 32 percent or so.

 

·        Despite strong sales in November and December, specialty jewelers’ full year sales were down 3.9 percent to $27.2 billion, versus 2007’s $28.3 billion.

 

·        Specialty jewelers’ December sales gains of 14.3 percent were dramatically ahead of December’s total retail sales gain of 5.4 percent and the December sales gain for all retail categories (except autos and food) of 5.6 percent. Thus, specialty jewelers took market share from other retail categories. However, they lost a small amount of market share within the jewelry industry to other merchants – generally multi-line discounters.

 

The 12.2 percent sales gain that specialty jewelers posted for the November-December holiday selling period was far above the IDEX Online forecast of just under a 3 percent sales gain. However, virtually all other forecasters were calling for flat-to-down jewelry sales. While it is likely that the December preliminary sales gain will be revised downward (the November preliminary sales gain of 8.8 percent was revised to a gain of 7.5 percent), we believe that the “final” number for December jewelry sales will still show a double-digit increase.

 

The graph below summarizes 2009 monthly sales trends for U.S. specialty jewelers.

 

Source: Dept of Commerce

 

Key Factor Fueling Sales – Americans Love to Shop

Why were jewelry sales so strong? And why were most forecasters wrong on the low side? It all has to do with the American shopper: they love to shop. Never underestimate the spending power and shopping prowess of the American consumer.

 

Outlook:  Continued Solid Sales Gains in 2010

In an environment of economic growth, consumers will buy jewelry, and they proved this during the 2009 holiday selling season. Many forecasters have predicted a “new normal” for shoppers who will focus on lower-priced goods. While we can’t argue with that, there are still plenty of shoppers who can buy expensive jewelry. Jewelers will need to be more intentional about up-selling and creating add-ons to sales.

 

Our major concern: specialty jewelers will continue to lose market share to other merchants selling jewelry, unless they create a “value” concept.

 

For more detailed information on December 2009 retail sales and holiday sales trends, click here.