Jeweller - July 2023

News
Cost-of-living pressures cause for
concern for jewellery retailers
Major retailers and small independents alike have expressed concern about
consumer spending trends.
Despite discretionary spending continuing to slow the Australian Bureau of
Statistics reported that consumers spent more than $35.2 billion in April, a
4.2 per cent increase on a year-on-year comparison.
Australian Retailers Association CEO Paul Zahra said that during a cost-ofliving
crisis, sales could be expected to decline.
“Cost-of-living pressures are the greatest current concern for retailers and
their customers and this continues to affect retail sales – a trend we expect
to see continue in the coming months,” Zahra said in a statement.
“While the numbers are still positive – the slowdown in retail spending
is certainly already in effect and when you factor in price increases these
results are having an impact on margins.
“Year-on-year spending on household goods continues to decline,
but this also reflects the bumper trading in this category during the
pandemic years.”
Michael Hill International has reported a 3.5 per cent decline in sales for
the second half of the financial year.
According to the company, third-party transactional data for the total
Australian retail jewellery segment has shown a double-digit decline in
sales for the first four months of the second half.
“Despite the more challenging market conditions and the resulting impact
on many retailers, I’m encouraged by the Michael Hill performance, as we
continue to take market share in our category,” CEO Daniel Bracken said.
“Looking forward to 2024, I’m energised by the pipeline of strategic
initiatives that underpin our aspirations for the group.”
Retail Edge’s latest assessment of more than 400 independent
jewellery stores revealed sales declined by 2.3 per cent in May on a
year-on-year comparison.
This softening of sales came off the back of an 11 per cent decline in April.
Signet reviews forecast after sales decline
Signet Jewelers has lowered its forecast for the remainder of the year
after sales declined in the opening quarter. Revenue for the world’s largest
retailer of diamond jewellery decreased by nine per cent on a year-on-year
comparison, reaching $US1.67 billion ($AU2.18 billion).
At locations open for at least 12 months same-store sales declined by 13.9
per cent and CEO Virgina Drosos attributed the results to ‘macroeconomic
headwinds’.
“In line with our predictions, there were fewer engagements in the quarter
resulting from COVID-19’s disruption of dating three years ago,” she said.
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She added: “We are proactively addressing the dynamic retail climate,
leveraging our team's agility and flexible operating model to raise our
cost savings target by up to $US150 million ($AU222.1 million) while
maintaining strategic investments.”
The company recorded a fourth-quarter sales slump of five per cent, with
Drosos anticipating that an increased focus on excluding Russian diamonds
from the US market would lead to positive sales.
Signet owns more than 2,800 stores worldwide. The company is now
forecasting sales of around $US7.3 billion ($AU10.81) for the financial year.