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Cost of Doing Business dissected
This week, Jewelers of America (JA) released the results of its annual industry benchmarking survey, the “Cost of Doing Business.” We received the results mid-day on Tuesday and posted a story immediately. To be honest, I'm a little surprised at...
This week, Jewelers of America (JA) released the results of its annual industry benchmarking survey, the “Cost of Doing Business.”
We received the results mid-day on Tuesday and posted a story immediately.
To be honest, I'm a little surprised at how little interest the survey story has generated on our Web site.
It was neither one of the “Most Popular” or “Most E-mailed” stories and, if it made an appearance on either of those lists since being posted on Tuesday, it was a brief one.
In times like this, I thought retailers would have been clicking in droves to have a look at the results and see where their jewelry stores stand.
I was wrong; looks like the Cost of Doing Business just can't compete with Heidi Klum.
In any case, the survey found a median sales decrease of 3.5 percent.
Breaking it down by store type, sales for chain stores fell 13.2 percent, followed by independent mid-range stores (5.5 percent), independent high-end stores (1.3 percent), and designer/artist/custom shops (0.8 percent).
JA pointed out that the 3.5 percent drop marked the first time sales “declined materially” in the survey’s 18-year history.
But a 3.5 percent drop doesn’t seem to jive with what we see happening around us in the jewelry industry today, does it?
A 35 percent drop seems more fitting.
And, based on the remarks posted in the online Comments box accompanying the story (which, oddly enough, turned into a mini-forum for a debate on healthcare...I guess any platform will do for a debate on that issue these days), some of our readers seem to agree.
So what could have caused such relatively sunny results?
I turned to JA for some answers.
As Lauren Thompson with JA so kindly explained, there are a couple of reasons the figures in the report might not be an exact reflection of industry averages.
To begin with, the report focuses on the median for each jewelry category.
The median is a mid-point for a data set, with one-half of the firms reporting figures above it and one-half below it - and is NOT an average.
The median is used, she tells me, because when taking a sample, as JA does for this report, there are wide swings in data and that can throw off an average.
Lauren also noted that while 687 stores took the survey this year, up from 384 last year, it is still just a sampling of the industry as a whole, intended to
be used as a benchmarking tool, not just a data reference point for the industry.
It’s also worth mentioning that the numbers included in the report are pretty close to the data provided by the Department of Commerce’s Bureau of Economic Analysis regarding jewelry and watch sales, as documented here by industry analyst Ken Gasssman.
One last thought that occurred to me when reading through the e-mail from JA: those figures are for all of 2008, eight months of which were spent in pre-recessionary state.
I know jewelry sales weren’t exactly stellar for the first eight months of 2008, but I think everybody can agree that it wasn’t until September that the economy really took a nosedive.
Still want to read more about the Cost of Doing Business?
Look for an in-depth analysis on the survey in upcoming issue of National Jeweler.
It’s also worth mentioning that the numbers included in the report are pretty close to the data provided by the Department of Commerce’s Bureau of Economic Analysis regarding jewelry and watch sales, as documented here by industry analyst Ken Gasssman.
One last thought that occurred to me when reading through the e-mail from JA: those figures are for all of 2008, eight months of which were spent in pre-recessionary state.
I know jewelry sales weren’t exactly stellar for the first eight months of 2008, but I think everybody can agree that it wasn’t until September that the economy really took a nosedive.
Still want to read more about the Cost of Doing Business?
Look for an in-depth analysis on the survey in upcoming issue of National Jeweler.
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