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The Centurion 2015 Holiday Sales Success Index: Still Working Hard For Results December 23, 2015 (0 comments)
Merrick, NY—The holiday season for luxury jewelers continues to be one where the gains come with great effort. The Centurion Newsletter’s spot-check survey of better jewelers’ sales for the third week of the season finds that 60% are doing as well as last year or better—but 40% are struggling to eke out some cheer during the holiday season. Of those, half are down significantly over the same period last year.
30% of respondents report their sales for the third week of the season are on par with the same week last year. Ironically, this same week last year was also the one time in an otherwise stellar season that luxury jewelers experienced a hiccup in their sales. This year, 17.5% of respondents say their sales for the third full week of the season are up significantly—10% or more—over this time last year. 5% say they’re up between 6% and 10%, and 7.5% are up a modest 1% to 5%.
"How was business for the third week of the season compared to the same period last year?"
Jewelers offered some insight into the most noticeable differences in this year’s business over last year. “It’s later and later,” said a jeweler in upstate New York. “Larger and larger sales; less volume but larger pieces. But I’m working harder and harder and I’m very tired!”
“Traffic is way down but the people that are coming in are serious buyers,” said a jeweler in Texas—an area hard hit by the dropping oil economy. Returning customers are spending as much as 50% more than last year, wrote another jeweler in Hawaii.
“Traffic has been good since the week before Christmas. The men came out shopping strong on Saturday, Dec. 19th. I know it's not over, but it's been the kind of Christmas we haven't had in many years. We've been selling Rolex, diamond fashion, and tons of Pandora and Alex and Ani. Some bridal, but not a big category for us this year,” said a Florida jeweler.
But other stores are not seeing the big sales they’re used to. “Unit sales are up, average price point is down,” said one. Yet another saw a drop in both unit and dollar sales, while a third reported watches are way off this season.
“Pearls are strong, traffic is strong, but the average ticket is lower,” said a jeweler in Maryland. Other jewelers reported sterling silver fashion in the $500 to $800 price range is a strong seller.
Finally, of those reporting large sales, those were almost all diamond. And more than a few respondents reported sales are clustered at the high and low ends with very little in between.
In the broader retail picture, a mid-December report from the National Retail Federation said November sales were up 3% over November 2014, and up 0.5% over October 2015. Unit volume is up—consumers are definitely shopping—but prices in many categories have declined since last year, resulting in fewer dollars in retailer coffers. The Bureau of Economic Analysis’ price index shows that general retail prices were 2.9% lower in October than a year earlier. A number of factors are behind the lower prices—including depressed oil prices—but much of the extra money freed up by lower gasoline and heating prices has gone to services such as travel and restaurants rather than retail merchandise, and most consumers have seen little in the way of wage increases. Meanwhile, rent, health care, and even services like wireless phone and broadband Internet are all up.
But more than anything, perhaps, is that consumers have become conditioned to expect discounts and promotions, says the NRF. All of this has combined to create a very deflationary atmosphere and retailers need to be competitive and drop prices to keep products moving off the shelves.
Richard Curtin, who compiles consumer sentiment data for the University of Michigan, noted that purchases of durable goods were at the highest level since 2006. He says consumers are willing to spend but—as has been the case since the end of the recession—they will continue to dig for discounts and sales. Still, says NRF chief economist Jack Kleinhenz, anything that’s good for consumers ultimately is good for retailers.
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