More holiday gift-buyers will snub jewelry

Fewer consumers are expected to choose jewelry items as gifts this year compared with last, a consumer spending researcher said in a National Retail Federation (NRF) holiday conference call with the media on Thursday.

Jewelry and precious metals are expected to constitute 22.2 percent of consumer spending in the 2007 holiday season, compared with 26.4 percent in 2006, Phil Rist, vice president of strategy for Columbus, Ohio-based research data provider Big Research said. This spending excludes engagement rings, which Rist called the "love market."

He added that fine jewelers will continue to be hurt by the amount of "cheap bling," or costume jewelry, now offered at higher-end department stores. For some consumers, this replaces the sale of actual gems and gold, Rist said.

In general, though, retail sales (excluding automobiles, gas stations and restaurants) were 5.1 percent higher in November 2007 compared with November 2006, and 1.2 percent higher than in October, the NRF said.

Rist said that while many predicted consumers would pull back on spending this holiday season, that doesn't appear to be the case.

"Consumers were taking advantage of the discounts retailers were offering," he said.

Rist said data shows consumers shopped sales and used those sales to cross people off their Christmas list, as well as "treat" themselves.

But jewelry does not appear to be at the top of those lists this year. Rist said the top sellers so far this holiday season are clothing, entertainment (books, CDs, DVDs), gift cards, toys and electronics (computers, TVs.)

Rist noted that the "gift card juggernaut" continues, with department store, restaurant and book store gift cards leading the charge. Gift cards for jewelry stores were not among the 10 most popular gift cards purchased.

Heading into 2008, Rist predicts consumer confidence will dip, and consumers will become more cautious with their spending, spurred by high gas prices and the continuing fallout from the subprime mortgage mess.

To do well in 2008, retailers will need to recognize the year's theme, which is that consumers will want to feel in control of their money.

"They'll be tightening up (going into 2008)," Rist said. "They can control their discretionary spending."
Source: nationaljewelernetwork