As inflation has dissipated over the past few months, growth of consumer expenditures has also slowed from 2008.
Highlights of 2008 holiday selling season are:
- Many jewelers informed that the number of transactions were reduced, but a perplexing number of jewelers reported that their number of transactions progressed slightly.
- Jewelry selling at the maximum price points suffered from the weakest demand. Lower ticket jewelry like silver and cheap gold jewelry was less weak.
- Jewelers posted extremely less big-ticket sales. Jewelers’ best customers invested significantly less during the 2008 holiday selling season.
- Customer traffic was usually weak, particularly in the malls. Strip center traffic was also weaker than estimated.
- Demand for larger diamond engagement jewelries was weaker than expected, though Tiffany said that it was one among its better-selling sections. So, bridal demand continued more or less in accordance with trend, though customers were spending less.
- Less than 10 percent of all jewelers posted a sales rise during the 2008 holiday selling season, according to IDEX Online’s sample base of U.S. jewelers.
- Jewelry and watches were one of the worst exhibiting categories for online merchants.
- The repair business remained to be solid. While this is just 11 percent of a normal jeweler’s business, according to the Jewelers of America Cost of Doing Business Survey, it is generally one of the most profitable sections for jewelers.
- Most chain jewelers said that December sales were much less than November sales. Both Zale and Sterling reported that December was extremely weaker than November, but Tiffany said that its December sales improved moderately.
- In the immediate post-Christmas selling period, sales were more for most jewelers.
- Inspite of tough conditions, jewelers who held the line on pricing were remunerated with a higher gross margin. Sterling Jewelers said that its gross margin will be increased to 250 basis points, and that its total year operating margin will be nearly 7 percent, somewhat above the industry average of nearly 5-6 percent or so.
- Most jewelers are over-inventoried in the post-holiday season. This means that suppliers must expect a much lower level of re-orders.