So, ready or not, the holiday season is just about here. And we are seeing a certain consistency in the holiday forecasts. Most think sales will increase; the only question is how high.
The National Retail Federation predicts holiday sales will rise 3.9 percent—which is higher than last year’s 3.3 percent increase, as well as the group’s 3.5 percent 10-year average. Deloitte’s retail practice is also upbeat, forecasting a 4 percent jump. On the downside, ShopperTrak thinks they will rise a more modest 2.4 percent. For now, only outlier is the Harrison Group, which is estimating that consumer spending will rise a whopping 6.9 percent.
But the question we all are asking is: How will jewelry do?
Pretty well, from what we’ve been able to glean from ShopperTrak and the Harrison Group. All in all, this has been a decent year for the industry, and if all goes well, that should continue.
There are two big caveats here. The first: Not everyone will reap the benefits of a good holiday. For the last few years, when JCK has asked jewelers how business is, we generally get two varieties of responses: “Great”—and we hear that quite a bit; and “flat” to “meh.” This industry seems to be splitting into people who are doing well and others who are just hanging on.
The other caveat is that we in the United States are now operating under a cloud. However one feels about the debt ceiling and government shutdown fights, they are not good for business. And given that they are happening right before the holiday, the timing could not be worse—especially since the more abbreviated calendar this year points to an early shopping season. Goldman Sachs estimates that the government shutdown is currently costing the economy 0.2 percent growth per quarter, and that will rise to 0.4 percent if it lasts more than four weeks. The uncertainty these battles cause is also worrying: We may have only a 5 percent chance of defaulting on our debt—but even a 5 percent chance of an unprecedented economic calamity is a little too much for most of us.
One hopes these things will eventually be figured out—hopefully as soon as possible. The more they drag on, the more they will be a drag on the holiday—just as the shooting in Newtown, Hurricane Sandy, and “fiscal cliff” negotiations were widely seen as hurting last year’s holiday.
Still, as people in the industry have told me many times over the years: “They never cancel Christmas.” We in the industry can’t control everything. But in the five years we’ve lived with the recession and slow economic growth, jewelry companies have become smarter, leaner, and more aggressive. We may not all be in better shape, but we probably have a lot of better businesses.
So assuming the outside world behaves, we will have a pretty good Christmas this year. Even better, we’ll have companies more able to take advantage of it.Follow JCK on Instagram: @jckmagazine
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