US jewelry sales falter, but market expects to come back in coming monthsMay 15, 19
First, the good news. The US Commerce Department reported that in March, retail sales had increased by with 1.6 percent, indicating that this was the biggest increase since September 2017. In February, retail sales had dropped 0.2 percent. Economists that were polled by Reuters had forecast that retail sales would accelerate only 0.9 percent in March. The growth in retail sales was 3.6 percent compared to March 2018. Unfortunately, these developments cannot yet be observed in the data for the US retail jewelry sector in February, as generated by the Commerce Department. In February, total jewelry and watch sales were a percent point lower than in the corresponding month in 2018.
For Specialty Jewelers, 2019 begins with disappointing sales
Specialty jewelers, also called Independents, still make up almost half of the retail jewelry sector. In February, these jewelers continued to suffer as sales dropped, like in the previous month, again, with more than five percent, compared to the same month in 2018.
Both in January and February, the jewelry market underperformed compared to the previous year. However, as general retail sales have begun picking up, the retail jewelry sector is expected to benefit, too, and see increased sales.
Specialty jewelers keep struggling
The below graph shows clearly that sales of jewelry are suffering across the board and that both independent and chain stores have experienced similar drops in sales.
While the US jewelry sector is preparing itself for a challenging 2019, other data suggest that the foundations of this industry are still solid.
In April, the Jewelers Board of Trade (JBT) published an excellent set of data on the retail sector in North America (the US and Canada), listing the total number of retailers, wholesalers, and manufacturers, along with new business openings and closures, as well as consolidations, mergers and, of course, bankruptcies.
Here is some encouraging news. While in the first quarter of 2019, the jewelry manufacturing, wholesale and retail sectors lost 864 companies, that pace is slowing down significantly - as much as 68 percent compared to the first quarter of 2018. Also, more businesses opened, fewer were sold or merged (-42 percent), and bankruptcies were negligible. Negative rating changes - one of JBT's most important and appreciated services is its rating system - were down. The number of claims filed with JBT also dropped.
There is no denying that the number of retail jewelry doors keeps dropping. However, the data indicate that those who remain in business are healthier than before. At a time in which online retail business is claiming an ever-larger market share, this is good news. Recent research shows that brick-and-mortar retailers can and do use an online presence to their advantage, and that the one complements the other.