On Data: Here’s How Independent Jewelers Did in 2022

Sherry Smith breaks down retailers’ performance last year, including how natural diamonds fared vs. lab-grown.

Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. She can be reached at sherry@edgeretailacademy.com.

Despite wide-ranging speculation about what sales results might be following 2021, the strongest year in the history of our industry, 2022 turned out to be a good year, all things considered.

Gross sales finished flat with independent jewelers. The momentum from the COVID economy (good for our business, less so for other luxury) parlayed into strong first and second quarters.

A more challenging environment settled in at the end of the second quarter, when a shortfall in unit sales (usually a good proxy for declining foot traffic) chipped away at gains made in the first half of the year.

Overall gross sales were down only 1/10 of 1 percent (basically flat) when compared with 2021, while units sold slipped 5 percent year-over-year in 2022.

Despite declines in some key performance indicators, the average retail sale ended the year up 6 percent.

One can speculate about why—the rising price of diamonds, fluctuations in metal pricing, economic climate, inflation, etc.—but the average retail sale has continued its four-year upward trajectory.

Gross profit dollars in 2022 were down 2 percent, potentially a result of some creative pricing practices in the fourth quarter.

The positive results in 2022 did not play out evenly across all categories, however.

“While lab-grown loose [diamonds are] growing in market share, [they are] still a small percentage of the market when compared with natural loose diamond sales.” — Sherry Smith

For example, all loose diamonds had consistent declines through the fourth quarter with gross sales down 21 percent in October and November, and down 20 percent in December.

Only the strength of H1 sales kept overall declines at 6 percent for the full year.

The picture for natural diamonds versus lab-grown diamonds was vastly different.

Natural loose diamonds were up 1.3 percent in gross sales for 2022, while gross sales of lab-grown loose diamonds grew a robust 45 percent.

Both natural diamonds and lab-grown diamonds were down in units sold, 7 percent and 9 percent respectively.

It’s also important to note that while lab-grown loose is growing in market share, it still comprises a small percentage of the market when compared with natural loose diamond sales in the independent channel.

Semi-mounts were down 7 percent in gross sales for the year after a challenging fourth quarter. Gross sales in the category dropped 22 percent in October, 13 percent in November, and 15 percent in December.

Semi-mounts were also down 10 percent in total units sold, but up 4 percent in average retail sale when compared with 2021.

Complete diamond engagement rings experienced similar results, showing declines in gross sales in October (down 19 percent), November (down 19 percent), and December (down 16 percent).

For the full year, independent jewelers recorded a 9 percent drop in gross sales of complete diamond engagement rings and a 14 percent decline in units sold, but a 7 percent increase in average retail sale.