U.S. jewelry and watch sales showed solid gains in November 2009 versus the same month a year ago. November is the first month of the all-important holiday selling season. American consumers, who have grown tired of the depressing talk related to the recession, invoked the old adage, “When the going gets tough, the tough go shopping” and went to the malls. Merchants reported that customer traffic was up and sales improved, though the average jewelry ticket was down by about 10 percent or so.

 

Here are the latest statistics related to November 2009 jewelry and retail sales in the U.S. market:

 

·        Total Jewelry & Watch Sales (all merchants) = +5.9 percent

o       Total Jewelry Sales (all merchants) = +5.7 percent

o       Total Watch Sales (all merchants) = +8.3 percent

 

·        Total Specialty Jewelers’ Sales = +8.8 percent

 

·        Total Retail Sales (all categories) = +2.5 percent

 

·        Total Retail Sales Ex-Auto & Food = +2.3 percent

 

Outlook: More Improvement Expected in December

Most retail merchants, including jewelers, said that the holiday selling season started slowly, and then improved each week, with peak sales occurring in the two weeks prior to December 25 as well as the week just after Christmas. Thus, we expect December sales to show even greater percentage gains than November.

 

However, it is important to understand that these large percentage gains are in part “a trick of the math. “Consumer demand – and jewelry sales – were so dismal in the 2008 holiday selling season that comparisons were incredibly easy in the 2009 selling period.

 

Specialty Jewelers Took Market Share

For the first time in many months, specialty jewelers’ sales were up significantly more than total jewelry and watch sales at all merchants. Specialty jewelers posted a sharp 8.8 percent sales increase while total jewelry and watch sales at all merchants were up by a more modest 5.9 percent during November 2009. The graph below summarizes monthly sales comparisons during 2009 for both specialty jewelers and for all retail merchants who sell jewelry and watches

 

Source: Dept of Commerce

 

Sales May Be Up, But Dollars Are Still Down

It is very important to understand what is really going on with the jewelry and retail sales numbers that are being reported by the government. Because sales were so depressed in the 2008 holiday period, any modest gain in dollar volume resulted in a percentage gain in 2009. On a total dollar basis, specialty jewelers’ sales were $2.4 billion in November 2009, up from a dismal $2.2 billion sales level in November 2008, but still far below November 2007’s $2.7 billion.

 

Further, November 2009 specialty jewelers’ sales of $2.4 billion were about the same as the level of sales achieved in both November 2003 and 2004.

 

The annual run rate for total jewelry sales – roughly $60.3 billion – was about the same level as jewelry sales in 2006. So, it would be reasonable for jewelers to feel like they really haven’t made any sales progress since the middle of the decade.

 

The graph below illustrates total dollar jewelry sales for specialty jewelers during November 2009 – about $2.4 billion. While monthly sales are up from the prior year’s $2.2 billion, they are still well below the record level of $2.7 billion set in November 2007.

 

Source: Dept of Commerce

 

Watch Sales Show Sharp Recovery

After lagging for many months, watch sales in the U.S. market surged in November 2009 versus the same month a year ago. Watch sales were up 8.8 percent in the month, well ahead of the jewelry sales gain of 5.7 percent for November. Again, a portion of the percentage gain is due to a “trick of the math” since watch sales were so weak last year. However, demand has strengthened, especially among watches at lower price points.

 

The graph below illustrates jewelry sales versus watch sales gains for each month of 2009 when compared to the same month in the prior year.

 

Source: Dept of Commerce

 

The table below provides detailed jewelry and watch sales data that was used to construct each of the graphs above.

 

Source: Dept of Commerce

 

Jewelry Takes Market Share from Other Retail Categories

While November was the first month which showed a gain in total retail sales in the U.S. market, jewelry sales posted their third consecutive month of gains. Total jewelry and watch sales rose by 5.9 percent in November, well ahead of the 2.3 percent sales gain for all retail categories, except autos and food, as shown on the graph below. Clearly, consumers are ready for some new fashion looks, and jewelry offered the opportunity for them to purchase items such as Pandora, Everlon, and other jewelry with a distinctive look that was a value.

 

The graph below compares jewelry and watch sales trends to total retail sales trends for each month of 2009.

 

Source: Dept of Commerce