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US Jewelry Market’s Bumpy Ride Into the Holiday Season

November 9, 2023 /

Overall US fine jewelry and diamond retail sales value widened the negative trend in October. Year over year, sales fell 9.5% by value and declined 6.8% by number of units sold. Average unit retail price declined 3% year over year.

Year to date, sales are down 8.2%, as overall consumer demand for fine jewelry keeps shrinking.

October Jewelry Sales Soft

The US finished jewelry market was soft in October. Total retail sales value was down 8.5% from October 2022. Total units sold dropped 7.7%. Year to date, retail sales value is down 6.3% and units are 5.2%.

There was significant regionality to the performance.

The Southwest recorded an increase in sales value of 6.3% against a decline of 10.5% in units sold. The high end drove the performance with items over $100k up 154.2% in value while the $20,000 to $49,999 retail price range was up 28.6%. Excluding these two high-end price points, sales value was down 7.9%.

The West recorded a decline in sales value of 4.4% and 0.6% in units. An increase in sales value in the $100,000 and over retail price range supported overall sales value. A 29.5% increase in unit sales in the $5 to $99 retail price range bolstered overall unit sales.

Other regions did not have high-end support and posted retail value declines of 8.6% in the East, 9.9% in the Southeast and 11.4% in the Midwest.

National performance in the under $1,000 retail price point was soft with value down 9.3% and units down 8.2%. The key $1,000 to $5,000 retail price range has shown its first real weakness since April with declines of 6.2% in retail sales value and 6.1% in units. The $5,000 to $10,000 retail price range dropped significantly with sales value down 10.5% and units down 10.4%.

Bridal, excluding loose diamonds, was down in value by 12.4% and 10.9% in units. Fashion jewelry was down 8.1% in value and 6.5% in units.

Natural diamond jewelry outperformed the market with retail sales value down 5.9% and units down 4.8%. Lab-grown diamond jewelry was up 36.4% in value and 55.7% in units. Combined, diamond jewelry was down 3.4% in value while up 1.8% in units. Lab grown represents 6.6% of all diamond jewelry sales in units and 6.4% in value.

October Jewelry Sales Value Positives

The $1,000 to $5,000 retail price range continues to demonstrate strength in two categories. Bracelets were up year over year by 4.9% in value and 5.7% in units. Bangles recorded a 17.2% increase in sales value with tennis bracelets up 5.5%. Necklaces were up 0.3% in value and 1.3% in units. Diamond necklaces both natural, up 11.0% in retail value, and lab grown, up 110.9% in retail value, drove overall necklace sales up 0.3% in value and 1.3% in units.

Diamond pendants showed surprising strength in the $5,000 to $10,000 retail price range. Natural diamond pendants were up 22% in both value and units with an average carat weight of 2.9-carats. Lab grown pendants were up 25% in both value and units with an average carat weight of 3.9-carats. Natural diamond pendants accounted for 94.6% of all units sold in this price range.

The October slowdown ends the relatively consistent market from April through September of this year. While there are isolated spots of growth, the weakness was widespread and challenging heading into the Holiday Season.

US jewelry sales value trend - January 2020 - October 2023. Source: Tenoris.bi.

Diamond Sales Rise in October

The combined value of loose diamonds sold by US jewelers rose year over year and month over month in October. The rise is fueled by easing diamond prices, especially of key items.

Total loose diamond sales rose 3.8% in October compared to September. The number of units sold rose 4.1%.

Natural Diamond Sales Value Rises MoM, But It’s Really About Size

Demand for natural diamonds continues declining in the US on a year over year basis. Value and unit sales were down 14% in October.

Month over month, sales rose 4.6% by value and 4.9% by units. To spur those sales, retailers reduced prices. Jewelers’ gross margins on loose natural diamonds were 34.2%, down 6.4% year over year.

Jewelers are now focused more on generating cash flow than on protecting their margins.

On the part of consumers, there is a steady shift of purchasing larger natural diamonds. From a 1.23-carat average in 2021, it rose to 1.63-carats in 2023. The trend is ongoing with the average purchase up to 1.70 carats In October.

One possible driver is the price decline that makes them more accessible. Another possible driver is lab grown. Consumers are rushing to buy larger LG as their prices keep crashing, establishing a trend. There is a possible halo effect at play here.

Underscoring this trend, sales of two carat naturals were up a mid-single digit vs September and October 2022. Their price, however, was down 6.5% month over month and 10.5% year over year.

Larger goods are witnessing an even greater rise in demand. Sales of diamonds in the 3-carat range rose 60% by number of stones sold and 23.6% by value. Sales of 4 caraters doubled in October month over month, and up 61% year over year.

The share of memo goods is rising, standing at 26.6% of goods sold in October compared to 24.3% in September and 17.7% in 2022.

There is a steady rise in inventory held by retailers. Some of it is a result of stocking up ahead of the holiday season. The number of units held by retailers increased 2%. Responding to changing consumer demand, the notable shift in inventory is towards larger goods, resulting in a 4% increase in the value of held stocks.

Average Retail Price & Cost of loose natural diamonds Jan 2020-October 2023 - Tenoris.bi data

Loose Lab-Grown Diamond Sales Value Up

After the declines in September, sales of lab-grown diamonds rose in October. Year over year, unit sales increased 45.6% but the total value of sales rose only by 11.4%.

The considerable difference in growth is driven by sinking LGD prices. Prices fell 23.5% in October compared to the prior year.

The average loss of a quarter of the value in the span of a single year is especially alarming when considering the change in mix. Consumers are buying larger LGD, half of goods sold are VS1 clarity, and more than two thirds are DEF color.

More than a third of sold loose LGD are in the two-carat range. In less than four years, their average retail price was slashed by more than 67%, falling 30% year to date.

Retailers’ gross margins keep inching up, averaging 65.2% in October. Almost needless to add this is a new record high.

Average Retail Price of 2 carat round SI-VVS lab-grown diamonds Jan 2020-October 2023 - Tenoris.bi data

The Issue of 50% Share of Loose Sales

Earlier this year we forecasted that loose lab-grown diamond sales will capture 50% of total diamond sales. That happened in July, after a series of share gains over the past few years. However, that share is now steady.

In the last four months, the share of LGD hovers around 50.8% bobbing up and down, but not gaining any meaningful additional market share.

This is a noteworthy trend, indicating that demand plateaued, at least for now.

Loose lab-grown and natural diamond unit market share chart - Jan 2020-Oct 2023 - source Tenoris.bi Sales value was very different

About Tenoris

Tenoris collects retail sales data from a broad representative sample of US jewelry retailers. It covers more than 6.5% of the market by value. Tenoris subscribers include retailers, manufacturers, miners, and financial firms. They use this data to study everything from broad market trends to price prediction, assisting them in identifying changing trends and opportunities ahead of their competitors.

If you want a better understanding of the US jewelry market, contact us to discover how our reports and tools provide comprehensive insights of the market. Tenoris can help improve your business.

Featured image: DALL-E


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