According to Tenoris, US jewelry sales by specialty jewelers rose 11.6% in October, indicating a strong start to the holiday season. Average retail price soared 15% year on year as American consumers are willing to spend more on themselves and loved ones.
Finished jewelry did well by any account. However, loose diamonds for custom designs are struggling. The main reason is the ongoing shift in demand for engagement rings.
US Finished Jewelry Sales Trends Up
The rise in sales was driven by demand for finished jewelry. Revenue rose 14%, led by demand for Fashion necklaces and finished engagement rings. Fashion necklaces often contain diamonds, and in 92% of the cases they are natural diamonds, bucking the trend of losing market share to lab diamonds.
Fashion necklaces are a good example of current finished jewelry trends. While revenue leapt 34.5% year on year and average expenditure per item climbed 39%, unit sales declined.
Unit sales declines are the norm. With few exceptions, all subcategories except tennis bracelets and finished engagement rings were down.
Diamond Jewelry Sales Up 9%
Although diamonds are under pressure, as consumer demand is wanning, finished diamond jewelry sales are doing well. In October, revenue rose 9% and average consumer expenditure per item soared more than 15%.
The resilience seen here underscores that the biggest issue with diamonds is with larger stones, often set in a customized jewelry item. For example, customized engagement rings.
Are Tariffs a Thing?
Since the new tariffs were announced in April, US retailers’ costs have been fluctuating.
Until the announcement, cost increases were single digits. Since May, they are mostly double-digit, indicating an impact. However, this may also reflect rising gold prices and with the higher retail prices. The higher the retail price, the higher the cost.
In October, costs rose 17% for all finished jewelry. The area most impacted was diamond jewelry, with costs rising more than 25% year on year. With most diamonds and jewelry coming from India, on which the US imposed a 50% tariff, consumers are not charged the full increase. Instead, the value chain is absorbing some of the higher costs.
We expect that to change over time. Tariffs are anticipated to decline, and most if not all the additional costs will be passed on to consumers.
Tariff Impact on Loose Diamonds
There was a clear tariff impact on diamond purchases by US specialty retailers. Diamond costs per carat rose 10% month over month, easing from the 14% it rose in September.
The tariff impact was most pronounced in the quantity of purchases, which declined year on year every month since June.
Diamond Sales Show Tariff Impact
While demand for finished diamond jewelry increased, sales of loose diamonds by US specialty retailers had another difficult month.
Natural diamond sales declined by over 10% year on year, with unit sales declining by more than 10%. The average retail price was slightly positive, rising 1% year on year.
The Loose Diamond Position Transition
For the fourth month in a row, loose diamond sales revenue has declined on a year-on-year basis.
In October, sales revenue declined 0.5% and unit sales fell more than 10%. This is surprising considering that most loose diamonds are set by retailers in engagement rings and that finished engagement rings are doing so well.
Natural diamonds are going through an unexpected phase. The decline in unit sales against a rise in demand for lab diamonds is leading to further erosion in market share. At the same time, consumers are willing to spend more on their diamonds, pushing up their expenditure by 11.4% year on year.
The result is a bifurcation within natural diamonds. A rising popularity on the higher end, as well as in the more generic items. The mid-section, where most custom diamond engagement rings were traditionally located, is losing consumer interest.
Tenoris US Jewelry Sales Data
The US jewelry market is an unusually fragmented one, posing challenges to identifying changes in consumer demand, retailer inventory, and pricing trends.
Tenoris is a trend analytics company that specializes in the US jewelry retail market, especially diamonds and finished jewelry. Tracking more than $20 billion in sales, we are the premier data source for US jewelry sales data. If you want to get the insights that will help you improve your competitiveness, contact us to request a demo today.
