Rapaport Magazine

U.S. Retail

By Lara Ewen
Erratic Buying, But Hope for the Holidays

Retailers reported that 2016 was simply unpredictable. Year-on-year results continued to be level or down, but traffic and sales figures were so erratic that even stores that reported positive results were concerned that sales figures wouldn’t hold steady. Most blamed a particularly acrimonious election year for making customers uncomfortable about spending too much cash. The overall hope was that post-election, the December holidays would bring consumers out, eager to let off a little pent-up steam and spend a bit more freely than they’d been spending throughout the year.

Up and Down
   Some store owners were struggling throughout 2016 with dicey numbers both at the register and coming through the door. “It’s been an up-and-down year,” said Ted Koester, owner of Herzog Jewelers in Fort Mitchell, Kentucky. “Overall, it’s been tough, because there seems to be less foot traffic and less demand. The numbers for the year are on track with last year, but it’s been very spotty and inconsistent.”
   Other retailers said that the election has had an impact and made customers less likely to spend. “It’s been quiet, which is fairly typical for us in an election year,” said John Hayes, owner of Goodman’s Jewelers in Madison, Wisconsin. “This year has been more cantankerous, and people have been more edgy. They’re still celebrating birthdays and anniversaries and weddings. But we’re down, and we’re down a lot. I hope we’ll have a good Christmas, though. As long as our customers don’t move to Canada.”

Feeling Positive
   By contrast, some stores were reporting very good sales. “It’s fun to talk about the election, but I don’t know if it’s affecting us or not,” said Doug Jones, owner of Dale’s Jewelers in Idaho Falls, Idaho. “We’ve had a good year, and maybe it would be better if we didn’t have this election. But we’re up 18 percent over 2015.” Jones says part of his success this year comes from the loss of some of his competitors, one of whom closed up shop earlier in 2016. “I’m counting my blessings,” he said. “One competitor was around for a while, just around the corner, and then there was the shake-up.”
   Even the jewelers who’ve seen positive numbers weren’t entirely comfortable. “We’re up over last year as of the end of September, but it has been unpredictable and uneven,” said Michael Han, owner and president of The Wedding Ring Shop in Honolulu, Hawaii. “We’re unable to determine what’s causing this.” Han said that he thought the problem was industry-wide. “The commoditization of diamonds is the largest single reason why jewelry sales are difficult,” he said. “Diamonds have lost a huge amount of exclusiveness, and thus desirability, due to the diamond industry’s race to the bottom.” Even so, he was hopeful. “I’m an optimist,” he said. “I believe the holidays will be very robust.”

Holiday Outlook
   Han wasn’t the only one feeling good about the upcoming holidays. “I can’t say things are great, but they’re not bad,” said Richard Neustaedter, owner of Neustaedter’s Fine Jewelers in St. Louis, Missouri. “This year is better than last year. We’re probably up 15 percent. Traffic in the area is very good, and we had the best September we’ve ever had in this location.” Neustaedter credits his positive sales with his work as a master hand-engraver, which allows him to cater to an increasingly custom-oriented clientele. “I do a lot of custom work for people,” he said. “People go online and look for something special and find us.” And he’s an optimist. “I think the holidays will be good,” he said. “Last year was a good Christmas, and this year should be good, if not better.”
   Almost everyone was finished buying for December and most expected the year to end on a high note. “Election years have never been booming years, but normally the fourth quarter is good after the election,” said Koester. “We’ll see, but 2016 seems to be on par with most election years. Most stores will be flat or down a tad. It’s been a strange year, but I think December will be healthy and will make up for some of the lost traffic from the summer and fall.”

Article from the Rapaport Magazine - November 2016. To subscribe click here.

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