The jewelry market softened year over year in February. Overall jewelry sales by US specialty jewelers fell 8.6%.
The declines reflect gradual receding consumer demand for diamonds from the record highs of 2021-2022. Jewelry sales declined 13.7%. Loose natural diamond sales declined too, down 21.7% versus February 2022.
On a month over month basis, total jewelry sales were up 26.1%, boosted by Valentine’s Day sales.
Jewelry Sales Soften in February
February jewelry sales softened after a relatively strong start to the year in January. Total unit sales were down 7.6% year over year. The total retail sales value was down 7.7%.
All product categories showed declines. Rings had the most significant decline, down 9.8% in unit sales and 8.0% in retail sales value. Within rings, bridal was down 9.4% by units sold, outperforming fashion rings which were down 13.8%. Bridal performed well in the over $100,000 price point as well as the higher volume $5,000 to $7,499 price range with unit sales up 3.1%.
The $1,500 to $5,000 price ranges declined slightly with all other price points showing double digit declines in unit sales year over year. Fashion rings were up in unit sales in the $7,500 to $9,999 price range, flat in the $50,000 to $99,999 price range and down at all other price points.
Necklaces continue to solid sales in the market with unit sales off only 1.4% and retail value up 6.6%. The category showed significant growth at price points over $12,500.
Diamond Jewelry Sales Suffer
Diamond Jewelry was off 13.0% in units and 9.7% in value. All retail price ranges showed declines in retail sales value. Natural diamond retail sales value, represent 93.6% of the market value, was down 12.2%.
The value of lab-grown diamond set jewelry increased 51.7% year over year in February. LG jewelry had a 6.4% market share of diamond jewelry sales by value, up from 3.8% in February 2022.
Polished diamond prices, both retailer costs and consumer prices, declined since the start of the year. The wholesale market, for both natural and lab grown diamonds, is extending its finances by providing more goods on memo.
Valentine’s Day did not go well for natural diamonds. Retail sales of natural diamonds are slowing this year. In January unit sales of loose natural diamonds declined 8.5% year over year and in February they declined a further 25%. The combined value of sales declined 12.5% compared to January-February 2022.
The average retail price per carat of diamond sold in February declined 2.6% on a month-over-month basis. Demand for diamonds retailing for the $2,000-$5,000 popular price range rose 9.2% compared to January but dropped 24.9% year-over-year.
Two price range areas displayed an exponential rise in demand. One is very low priced items, loose retailing for less than $500. The other is high-end goods, loose with a total price of $50,000-$100,000.
The share of memo goods keeps rising. For the fourth month in a row, the share of memo goods was 20% or higher, up from the 17.8% it averaged in 2022. This is a trend to pay attention too as it serves as a possible indication of market strain.
Inventory levels of loose held by retailers was fairly steady in the last few months.
During 2022 there were signs that branded diamonds are doing better after a decline in consumer demand in 2021. But looking at the whole of 2022, branded diamond sales were slashed in half by number of items sold and total value down by 32.3%. That trend continued in January, with general unit sales declining 41.7% year over year. In February, sales were up versus January as expected, but clearly declined year over year.
Lab Grown Diamonds
Demand for lab-grown diamonds was robust in February. Unit sales were up 59% year over year in February. By value, sales increased 20%. As these figures indicate, LGs popularity is rising, while prices keep declining.
The average per carat retail price of lab-grown diamonds declined 2.6% in February compared to January.
LGs growth rate is remarkable. After gaining a sales share of 42.5% in January, in February 46.6% of loose diamonds set by specialty jewelers were lab grown. To place this in context, in 2020 this share stood at 13.7%.
We are not far from the day when the majority of loose sold by US specialty retailers is lab grown. At this pace, this will happen within a few months and before the year end.
Retailer’s gross margin continued to increase, inching up to 54.6% in February.
Memo goods are up for lab grown, nearing 21% in February.
Tenoris Data Update
We performed several small system tweaks over the past several months. Among them is the addition of a few KPIs and improved graphs with the hope data is clearer. Some of the reports now have a wholesale pricing page.
Most importantly, we recently added 62 new retailers to our common retailer panel. This added $327 million worth of transactions in 2022 alone. This made our data richer and of course improves its statistical accuracy. We are working on adding more. The next retailer update will take place with the July data update.
More functionality updates are on their way.
If you want to better understand the US jewelry retail landscape, check out this interview. In it, Chris and Edahn discuss Tenoris’ services and provide a live demonstration of the system. They show how to get a deeper and detailed understanding of the market and how it can help improve your business.
Photo: Towfiqu Barbhuiya