(IDEX Online) - Jewelry sales in the U.S. market rose by 5.8 percent in August. While this was the smallest monthly gain this year, it was robust by historical standards. In part, the sales gain was more modest than prior months because comparisons are becoming more difficult against last year.

 

After plunging in late 2008, jewelry sales clawed their way back slowly into positive territory later in the second half of 2009. As a result, we look for smaller percentage sales increases in the final four months of 2010.

 

Specialty jewelers posted disappointing results in August. Their sales were up by a modest 3.2 percent. While this was not the smallest monthly gain in 2010, it continues a trend that has deep roots: specialty jewelers are losing market share to other merchants – mostly multi-line discounters – who sell jewelry.

 

Here’s what newly released data from the U.S. Department of Commerce shows:

 

·        Total U.S. jewelry sales rose by 5.8 percent to $4.4 billion in August 2010 over the same month last year. Compared to prior years’ August results, August 2010 jewelry sales are now running above monthly jewelry sales levels of $4.3 billion which were posted in the pre-recession period of August 2007 as well as August 2008, both record levels for jewelry sales in the month of August.

 

·        Specialty jewelers’ sales rose by 3.2 percent to just under $2.1 billion in August 2010, when compared to their jewelry sales in August 2009 when sales were about $2.0 billion. Unfortunately, specialty jewelers’ sales are still running below record levels in prior years. For example, in August 2008, specialty jewelers posted sales of nearly $2.3 billion; interestingly, that was just before the recession hit the jewelry industry with a vengeance.

 

·        Jewelry sales gains of 5.8 percent far out-paced total retail sales gains (all categories) of about 3.9 percent in August. Jewelry continues to capture an increased share of wallet in the U.S.

 

Source: U.S. Department of Commerce

 

Outlook for 2010 Positive

It seems a foregone conclusion that neither the U.S. economy nor the global economy will slip into a double-dip recession. Recent data relating both to unemployment and manufacturing suggest that there has been no further deterioration of those markets. Further, the Fed has committed to supporting the U.S. economy with additional stimulants, if necessary.

 

Based on the latest data – eight months of 2010 – it appears that the U.S. jewelry market will generate sales in a range of $62.2 billion to $63.0 billion this year. This would represent a record year for the industry. The prior record year was 2007, when jewelry and watch sales reached $62.0 billion.

 

IDEX Online Research is projecting that 2010 holiday jewelry sales will be up by 2.5 percent to 3.0 percent. While this sales pace is well below the sales gains so far in 2010, it is due to much more difficult comparisons over the next four months.

 

Long term jewelry sales forecast: Source: U.S. Department of Commerce

 

Beyond 2010, IDEX Online Research expects the U.S. jewelry industry to continue to post stable growth in the 4-5 percent range annually, with a pause mid-decade while the economy digests a modest recession. Recessions are fairly predictable by economists, and consensus forecasts call for a slowdown around 2015 or 2016.

IDEX Online Research has also published three forecasts recently: the 2010 Holiday Jewelry Sales Forecast, the 2010 Holiday Diamond & Diamond Jewelry Sales Forecast and a Long Term Jewelry Sales Forecast.

 

September sales flash: a small sample of specialty jewelers in the U.S. market reported that their sales were surprisingly strong in September. Full data for September will be available in mid-November.

 

The full analysis 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.