(IDEX Online) – There were modest rises for jewelry and watch retailers in June with sales in the U.S. rising by 3.4 percent on the year to $5.55 billion, based on preliminary US government figures.

 

The June figure was close to that seen in April with a rise for that month of 3.7 percent and both of the last two months for which the data is available being around twice the level of increases seen for the five months before that.

 

The summer doldrums have set clearly in, and we expect more modest sales comparisons for the next couple of months.  Specialty jewelers lost market share in June to multi-line discounters like Wal-Mart and Costco..

 

June is also the month that the government makes adjustments going back several years. Among the major revisions are that for US jewelry sales in 2013, which were revised downward to $76.9 billion from $79.2 billion. The prior months’ figures were basically unchanged, so no significant revisions for specialty jewelers.

 

 

There was a sharp drop on the month in sales at specialty jewelers in June compared with the figures for the month before which reversed the situation seen in May.

 

Meanwhile, retail sales versus jewelry watch sales ended in a tie in June.

 

Total Jewelry Sales +3.3%

Jewelry sales alone, excluding watches, increased by 3.3 percent on the year in June to $4.89 billion, based on US Department of Commerce data.

 

Fine Watch Sales +3.6%

Fine watch sales rose by 3.6 percent in June to around $670 million.

 

Consumers voted with their feet and bought goods at specialty jewelry stores rather than shops selling jewelry along with a wide range of other items.

 

Fine watch sales have kept their proportion in the broader jewelry and fine watch sales category at around 12 percent as is clear in the following graph.

 

This mix of watch sales is climbing, after falling to 11.6 percent of sales in 2010, as the industry was still reeling from the impact of the “Great Recession” that began in 2007.

 

In 2006, just prior to the recession, fine watch sales represented 12.1 percent of total fine jewelry and watch sales in the U.S. However, during the recession, consumers tightened their purse strings, and slowed their buying of expensive, flashy watches.

 

Outlook

The retail jewelry environment remains precarious, according to the latest figures. The data for May appeared to indicate a strong rise in sales of 5.6 percent, but that has now been revised down to an increase of 3.7 percent. The figures for the past six months were also all revised downwards.

 

The U.S. economic outlook appeared to be on an upswing in the past several months, with the unemployment rate declining and an apparent rise in economic growth after a bleak and wintry start to the year. The financial situation, however, seems to have remained unclear.

 

In addition to those factors, the summer months are notoriously quiet, with little reason for shoppers to buy jewelry.