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RAPAPORT... U.S. specialty jewelry store sales fell 4 percent year on year to $6.11 billion in December, closing the year on a downer. December's sales total was the weakest since 2011 and followed a 6.2 percent decline for stores in November; still, jewelry store sales managed to increase 1.1 percent to $33.61 billion in 2014. Jewelry sales from all channels began to soften in September as the pace of growth slowed to just 1.2 percent year on year at $4.769 billion, followed by a 1.3 percent decline in October to $4.761 billion. As the Christmas season was heating up, jewelry sales fell 0.6 percent in November to $6.134 billion, setting a trend that carried through December as sales dropped 1.5 percent to $13.419 billion, according to preliminary Rapaport News calculations.  Watch sales were flat in September at $650 million, but then, in October, they contracted 2.8 percent to $649 million and they dropped 2.2 percent in November to $837 million, followed by a 2.5 percent decline in December at $1.83 billion. For the year, jewelry sales were basically flat, or down 0.1 percent year on year, at $69.188 billion, according to preliminary data, while watch sales increased 1.4 percent to $9.461 billion in 2014. Meanwhile, advanced government estimates on department store sales offered some hope to jewelers for the new year. Department store sales rose 0.2 percent year on year to $10.64 billion in January, showing that U.S. consumers were willing to spend. Advanced sales estimates for all retail and food service sales, excluding automobiles, rose 1.4 percent to $320 billion. Nonstore retail sales improved 8.3 percent in January, while retail trade sales rose 2.4 percent, according to government data.
Lindsey M. Piegza, the chief economist for Sterne Agee, observed that U.S. consumers are simply pulling back. "Lower gas prices provided a welcome boost to sales early on (October and November) and will continue to provide a floor to spending, but continued, above-trend growth in sales will need to stem from organic job and income growth. "The U.S. labor market is improving in terms of the number of jobs created, but the quality remains lackluster, putting little upward pressure on wages and keeping consumers cautious. Going forward, gasoline price windfalls will continue to keep overall spending positive, but at a slower pace than the initial rise in October and November would suggest, meaning a more muted contribution to GDP from consumer spending," she said.
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