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SurveysOct 07, 2014
Jewelers weigh in ‘solid’ holiday growth prediction
The most recent holiday sales forecast, released Tuesday by the National Retail Federation, predicts that consumers will spend 4 percent more this November and December than they did last year.
Washington--The most recent holiday sales forecast, released Tuesday by the National Retail Federation, predicts that consumers will spend 4 percent more this November and December than they did last year.
Jewelers who spoke to National Jeweler Tuesday said while they don’t see this forecast as overly optimistic, it will be the high end of the market that’ll drive the growth.
In total, the NRF said U.S. consumers will shell out a total of $616.9 billion in those two months due to improvements in key economic indicators, including jobs and housing data, that “will give way to increased spending power among holiday shoppers.”
“Though we have only seen consumer income and spending moderately, and erratically, accelerate this year, we believe there is still room for optimism this holiday season,” said NRF Chief Economist Jack Kleinhenz. “Consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers.”
Still, Kleinhenz noted, “Shoppers will still be deliberate with their purchases while hunting for hard-to-pass-up bargains.”
Kelly Newton of Newton’s Jewelers in Fort Smith, Ark., said it’s hard to tell whether the NRF’s predictions will hold true but noted that sales at his store this year so far have been even with, or better than, last year.
He said has had to increase his prices in the past year, notably due to the rising cost of diamonds, but it hasn’t seemed to deter customers.
“People aren’t shying away from higher prices,” Newton said, “But I think we have a more selective group of customers now. I think we’re seeing fewer customers spending a lot of money, as there’s fewer people in the market that can and are willing to spend that kind of money. They’re still shell-shocked from the recession.”
Newton said higher price tags on products also could play a part in predictions, such as the one just made by the NRF, of increased consumer spending. “People are spending more, but things are costing more,” he said.
The NRF isn’t the only organization to predict a 4 percent increase in spending this season; consulting and financial advisory firm Deloitte said last month it expects holiday sales to climb between 4 and 4.5 percent over last year and online sales to increase as much as 14 percent.
“I’m not sure I believe
it,” said Jeffrey Mann of Jeffrey Mann Fine Jewelers in Toledo, Ohio. “Part of me says yes, because we play in the high end of the market, and I think the wealthy are getting wealthier, but I’m not sure about mainstream America. From that standpoint, I’m not sure it’s going to happen.”
Mann said personally, he could fathom a 4 percent increase in holiday sales.
“Can I do it? Yes, through the strength of some big sales, I can have a roaring holiday season,” he said. “But I’m not sure I’d see it from the middle part of my customer base. For mainstream America, things haven’t gotten as good. Maybe because of the limited arena I play in, I wasn’t as aware of it as recently, but none of my vendors seem to be saying, ‘Wow, we’re setting the world on fire.’”
The jeweler said comparatively, he’s even with sales at this point last year but he’s also raised his margins.
“It’s just been a change in philosophy,” he said. “I think those of us that are creative this year, that find ways to bring business to us rather than waiting for it to walk through the door, are probably going to be more successful.”
Last year, holiday sales increased 3.8 percent, according to the NRF, which was almost exactly in line with the organization’s prediction of 3.9 percent.
The NRF bases its sales forecast on an economic model that utilizes several indicators, among them consumer credit, disposable personal income and monthly retail sales releases.
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