National Retail Federation Predicts a Cheery Holiday
October 22, 2018
The National Retail Federation (NRF) says that all of the building blocks are in place for a strong 2018 holiday season in the U.S. – it is predicting an increase of 4.3% to 4.8% over last year.
The NRF said the strong economy, wage growth and rising consumer confidence should offset concerns of rising prices from escalating trade tensions to bring consumers to stores and online marketplaces. One caveat – the survey was completed before the mid-October stock market volatility.
Online sales continue to take a bigger slice of the retail market, but many traditional retailers are adapting to the cyber market to claim their share. Retail sales will be done increasingly across multiple “channels” (online, mobile and in-store), according to top retail executives who spoke at GIA’s October International Gemological Symposium.
Jason Goldberger, CEO of Blue Nile, noted that in the future “nobody will be talking about retail channels” because they will blend into an overall shopping experience. Gina Drosos, CEO of Signet, the parent company of Kay Jewelers, Zale Corp and Jared the Galleria of Jewelry, said this is already the case because many sales begin online and end in the store.
The Conference Board’s Consumer Confidence Index hit its highest point in 18 years last month with a solid majority seeing the U.S. economy continuing to improve for the remainder of the year. Consumers surveyed also noted a strong job market as the main reason for their optimism.
De Beers’ October cycle (sight) sales totaled $475 million – a sharp rise from the same period last year. De Beers’ Group CEO Bruce Cleaver said the Indian rupee/U.S. dollar exchange rate (the rupee has fallen 15% against the dollar this year) “impacted demand for lower value categories” but that the rough market remains strong from U.S. demand.
In China, the on-going trade war with the U.S. has created a lot of uncertainty among retailers there, so they are taking a very cautious approach. (See September 2018 Industry Analysis).
The declining rupee affects smaller Indian diamond manufacturers who deal on the local market more than larger, international firms. The large India-based diamond firms have U.S. dollar accounts so their costs actually have declined a bit in recent months as prices have softened. Smaller companies, who have to pay in rupees, have seen rough prices rise as their currency declines.
Increased recovery and sales of larger diamonds helped Alrosa report a 9% year-on-year increase in rough sales to $331.6 million. Russia’s diamond producer noted the decline in demand for smaller goods as well, but said increased sales of 2 carat-plus rough and “specials” over 10.8 carats have increased.
Sotheby’s Geneva is set to auction an array of royal jewels that belonged to Marie Antoinette and others in mid-November. The Royal Jewels from the Bourbon Parma Family sale on 12 November will feature important pieces that belonged to the French queen, as well as other rulers from the Habsburg and Bourbon families. The jewels had been kept under wraps for nearly 200 years before resurfacing this year.
Christie’s is trying to capture some of the auction attention by offering the 18.96 ct Pink Legacy, a GIA-graded Fancy Vivid pink diamond that is property of the Oppenheimer family on 13 November. De Beers’ is hoping the diamond will shatter the world record price for a pink diamond, which stands at $46 million.
Russell Shor is a senior industry analyst at GIA in Carlsbad.