US jewelry sales further down, while overall retail market improvesAugust 06, 19
(IDEX Online) - In May 2019, like during the four previous months of this calendar year, jewelry sales continued to suffer. Watch sales, on the other hand, have been improving though the first five months of the year, albeit in low, single digit increments.
In May, the fall in sales of jewelry registered at 8.7 percent, compared to May 2018, the sharpest fall for the year. As the various graphs show, in May 2018, jewelry sales peaked positively, showing a growth of more than 10 percent.
Currently, the jewelry sector's performance stands in shrill contrast with the overall performance of the US retail sector. During the first half of this year, US retail sales maintained their upward trajectory. In June retail sales were up 0.6 percent and 2.3 percent for the first two quarters compared to 2018.
One explanation for the retail jewelry sector's negative performance is that, while consumers are spending more on cars, gas, restaurants, and are also spending significantly more on online and non-store sales (a 11.6 percent rise year-over year), the American consumer remains hesitant in spending her or his discretionary dollars on luxury. Watches, apparently, are not necessarily regarded as a luxury item any longer.
Both independents and chains see steep drop
In May, specialty jewelers - those retail jewelers that are often family-owned and therefore called mom-and-pop jewelry stores - saw sales drop with 7.6 percent. Total retail jewelry sales dropped 7.7. percent. While during the first quarter of the year US retail sales had been negative across the board, they began picking up in May.
The Jewelers Board of Trade (JBT) said in a recent report that in the second quarter of the year, 185 jewelry businesses had ceased operations, constituting a 21 percent drop compared to the second quarter of 2018.
Among those 185 closures, 135 were retailers and 36 wholesalers and 14 jewelry manufacturers. In general, the rate of companies closing is slowing down. JBT noted that at the end of June 2019, 26,252 stores were open for business, compared to 26,909 in June 2018.
The JBT, as did various analysts, didn't seem overly concerned with the contraction of the brick-and-mortar jewelry market. As shown in the data above, consumers are changing their buying habits and lower footfall in retail businesses is one of the results.
US jewelers will continue to see market contracting
As can be seen in the relevant chart, May wasn't kind neither to the independent retail jewelers, those jewelers that are part and parcel of the communities they live and work in, nor to the national retail jewelry chains. But they were not the only sector to feel the pressure in retail. The apparel sector, as well as the sporting goods branch, also suffered declining sales, albeit in lower percentages. In general, retail store closures are on the rise.
Watch sales, as noted above, have been spared the downfall of jewelry over the course of the first five months.
There is no doubt that American jewelers are experiencing a down-turn, across the board. It is however important to look at the bigger picture. The US Commerce Department released data earlier this month, saying that retail sales had risen 0.4 percent in June. Sales made by online retailers, grocery stores, home and garden stores and restaurants and bars all grewe. The numbers published by the National Retail Federation (NRF) were even better. The NRF said retail sales had gone up 0.6 percent in June, seasonally adjusted from May, and 2.3 percent up year-over year. The numbers are consistent with elevated consumer sentiment, healthy household balance sheets, low inflation, and job gains. Retail sales account for about one-third of Americans' spending, while the other two-thirds are in services.