Jeff Miller / Rapaport News on Diamonds.net
Jeff Green, president of Jeff Green Partners, discusses where his firm sees consumers spending on jewelry for Christmas season 2010. Given the current state of the U.S. economy, the lower end, or value end, and the luxury side of the jewelry marketplace should experience a strong season. Middle-range jewelry however, in the $200 to $5,000 price points, will remain weak.
According to the statistics collected by Consensus Advisors for its presentation, “Consensus on The Economy, the American Consumer and the State of Retail Entering the Holidays,” U.S. economic conditions are improved from one year ago for both retailers and working consumers. Although consumer sentiment is nowhere near pre-recession levels, and the unemployment and underemployment figures remain deeply troubling, retail analysts predict that holiday sales this season will increase somewhere in the low single-digits.
One interesting parallel between shoppers and retailers has been that both groups reduced debt and socked away cash in the past year. Consumer investments are still worth less than pre-recession years, due to the dramatic housing collapse, nearly flat incomes, and high costs of living. Retailers may have a lot of cash on their balance sheets, but that is due to reduced capital spending and trimming costs; while sales growth is primarily coming from new stores. Average store sales and inventory levels are lower than they were one year ago. Consensus Advisors believe that as long as Christmas sales show promise, and there are no major political or economic traumas on the horizon, retailers may begin to spend some of their cash to expand in 2011.
On a side note, the group expects that U.S. jewelry sales will hit about $60 billion this year, or about where it was in 2008.