A recent article written by diamond analyst Paul Zimnisky on Solitaire, an B2B gem and jewelry magazine published by India’s Gem and Jewellery Export Promotion Council (GJEPC), examines how the post-pandemic return to travel and entertainment “could be drawing some discretionary spending away from the jewelry category.”
According to Paul Zimnisky estimates, 2021 was an excellent year for global diamond jewelry sales. Sales in the category grew to almost $90 billion “as confident consumers (boosted by economic stimulus) looking to give meaningful gifts bought diamonds.” Spending was further enhanced by “the unavailability of traditionally competing experiential consumer options such as travel and entertainment.”
The picture looks different as we look back at 2022: In December, Signet Jewelers, the largest diamond retailer in North America, said its same-store-sales fell by almost 8% year-over-year, attributing the results in part to a “consumer behavior shift […] as the Western world has emerged from pandemic related restrictions over the last two years.”
Zimnisky then looks at jewelers in Greater China, who are “still dealing with severe disruptions as the Chinese government has maintained a strict “Zero-Covid” policy” into 2022. These measures in major cities, including Shenzhen, Chengdu, Xian and Guiyang, “have negatively impacted the entirety of the Chinese economy – and this year, jewelry as a category in China has not outperformed as it did during 2020 and 2021.”
In the six months ended September, Chow Tai Fook’s same-store-sales fell 8%. LVMH said in October that customer traffic in Mainland China is “still nowhere near 2019 levels.”
Zimnisky’s analysis is further validated by the recently published Mastercard SpendingPulse report, which shows a drop of 5.4% year-on-year in jewelry sales in the US “despite a growth in overall spending of 7.6,” according to IDEX Online. The report includes figures of in-store and online purchases for November 1 to December 24. Spending in restaurants was up 15.1% compared to the same period in 2021, and spending on clothes was up 4.4%. Spending on electronics was down 5.3%. Despite the drop in jewelry and electronic sales, total retails sales, not including the automotive sector, were up 7.6%.
Read the full analysis here.
