Holiday Jewelry Retail Sales Should Go Up

October 18, 2005

Holiday Jewelry Retail Sales Should Go Up

U.S. jewelry sales are projected to rise by a moderate 3-4% during the 2005 holiday selling season, according to Ken Gassman, industry analyst for IDEX Research. "That's better than last year's weak 2% increase, but well below solid gains posted in the 2002 and 2003 selling seasons," says Gassman, who follows major jewelry retailers. The analyst said demand for diamonds and diamond jewelry will be strong, gold sales will be in line with industry averages and all other main jewelry categories will post substandard gains.

Gassman says there are some positives in the outlook you can use to improve your odds of a good season. "To paraphrase Winston Churchill, the pessimists will see the difficulties while the optimists will see the opportunities."

"The consumer wealth factor is strong. "When consumers feel wealthy, they tend to loosen their purse strings," says Gassman. "Between home price appreciation and stock market performance, personal wealth levels are at record heights." Also, wealthier consumers don't feel increased gasoline prices as much as those in lower income brackets. "These high-income households, representing 32% of all U.S. families, account for just over 60% of total jewelry spending. In short, about one-third of American households are responsible for almost two-thirds of all jewelry sales," says Gassman.

Jewelry is a balm, says Gassman. Consumers will be looking for something that makes them feel good, to relieve stress after all the bad news this year. "Luxury goods such as jewelry are often the beneficiary of shopping flings," says Gassman.

One extra day in the holiday season. This year, there will be one more shopping day in the period between Thanksgiving and Christmas versus last year. Because Christmas occurs on a Sunday this year, shoppers have until Saturday evening to complete their shopping. Saturday is traditionally an important shopping day, says Gassman.

Post-Christmas week could be a pleasant surprise. Most employers will observe the Christmas holiday on Monday, Dec. 26. Shoppers are expected to be out in full force in the stores that day. "As a result, aggregate consumer spending during the final week of December could make it the most important shopping period of the 2005 holiday selling season," says Gassman.

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