Although official retail sales figures for December 2015 will not be released by the Australian Bureau of Statistics (ABS) until 5 February, two of Australia’s major retail industry associations have expressed optimism towards consumer spending over Christmas.
Russell Zimmerman, the executive director for the Australian Retailers Association (ARA), said the latest ABS statistics, which showed Australian retail sales rose 4.1 per cent to $24.8 billion in November compared to the previous year, were a good indicator of December spending.“[The] ARA is incredibly pleased to see that the markers are strong for growth of total Christmas spending for 2015 to be in line with the ARA and Roy Morgan Research’s prediction of 3.6 per cent growth to $46.8 billion,” Zimmerman said. “Jewellers specifically have reported reasonable trade over the Christmas period.”
National Retail Association (NRA) CEO Trevor Evans agreed the November figures were positive, noting that, generally, retailers had indicated 2015 was “their best year since before the GFC (Global Financial Crisis)”.
“This is largely due to stronger consumer confidence, strong property values, low interest rates and a more encouraging political and economic environment as 2015 transpired,” he explained.
“Based on the information we’ve received in recent weeks, we are now projecting a total spend for the holiday period of around $45.1 billion – an increase of 5.7 per cent compared with 2014.”
Zimmerman told Jeweller that while most retailers saw an increase in trade during Christmas compared to the previous year, some experienced mixed performance – mostly small, independent stores.
Interestingly, the three jewellery buying groups – representing more than 900 independent stores across Australia and New Zealand – indicated that although members had reported varying results, overall, the 2015 Christmas period had largely traded better than the previous year.
Nationwide Jewellers managing director Colin Pocklington said on average, member sales had been “just a few per cent up on last year”, while Leading Edge general manager Joshua Zarb said same-store sales within his buying group had reached a record high.
Carson Webb, general manager of Showcase Jewellers, commented that 2015’s festive season had been “about units and not high average sales” but that the average sales amount for the month of December had been steadily rising for the past five years.Both Webb and Zarb additionally noted that the most recent Christmas period had been characterised by a last-minute rush of sales, which was also acknowledged by Michelle Stanton, CEO of retail chain Bevilles Jewellers, and Phil Edwards, managing director of jewellery supplier Duraflex Group Australia.
Stanton said Christmas trading for Bevilles had been “to expectation”, while Edwards described it as “consistent,” adding that “… as always, [it’s] our busiest time of year for retail partner [stockist] re-orders”.
Peter Jakobsen, managing partner of Endless Jewelry supplier Nordic Jewellery, reported mixed feedback. He said some retailers had had “fantastic pre-Christmas figures” while others had found that Endless stock did not move as quickly as they had hoped.
Jakobsen emphasised that having only launched locally six months ago, the brand was still “very young”, adding that overall, he was happy with the results.
From an independent retailer perspective, Laurene Coates of Jade Jewellers in Queensland said Christmas sales had been in line with 2014, although she had hoped for a higher result. She added that the average spend had been down.
Harmonie Smith of Regal Jewellers Moe in Victoria said her store’s sales for the period had been slightly lower than the previous year, but that she had still been satisfied given she was no longer stocking Pandora, which had previously made up a considerable proportion of sales.
Chris Hood of Tasmania-based retailer Metal Urges Fine Jewellery and Diamonds added, “Off-the-shelf retail continues to fall in favour of made-to-order work, and the average price on made-to-order [jewellery] is climbing strongly for us.”
Top performersWhen asked which jewellery brands and product categories had been popular this trading period, Zimmerman commented, “Our jewellery members have reported that products such as Endless and Pandora have been particularly strong sellers over the pre- and post-Christmas trading periods.
“Diamond [sales] have been less robust,” he added. “There appears to have been higher volumes of jewellery items sold, but of lower values.”
Zimmerman’s report was consistent with comments from some of the jewellery buying groups. Pocklington noted there had been high consumer demand for items under $200. Zarb also said “larger, top-end sales” had been harder to close and that branded and promotional merchandise had performed well.
Coates and Smith said the popularity of branded jewellery was reflected in their stores, with Nikki Lissoni, Ice-Watch, Disney Couture and MelanO Jewellery amongst the best-sellers mentioned.
Webb commented that coloured gemstones and gold jewellery had made “a strong comeback”. He also said watches – especially men’s watches – showed “strong signs of growth”. Hood agreed coloured gemstone demand was continuing to grow, with Stanton stating that men’s watches and engagement rings performed particularly well.
Post-Christmas tradingThe ARA and Roy Morgan Research predicted Australian shoppers would spend $16.8 billion in the post-Christmas period from 26 December 2015 to 15 January 2016, 4 per cent higher than in 2014–15.
The cross-section of the jewellery industry that Jeweller spoke with, however, offered diverse views on how the sector traded during this time.
Zarb said that although it was only anecdotal, it appeared post-Christmas trading across Leading Edge members had been “stronger than expected”. Webb also said Boxing Day sales for Showcase had been “excellent”, noting that the clear “winners” had been retailers that had engaged in a promotion to clear aged product. At the time of publication, Nationwide had not yet received Boxing Day and January sales feedback from members.
Stanton said Bevilles’ post-Christmas trading had also been strong, while Coates and Hood indicated the period had been “slow” and “quieter” than in previous years for their independent businesses.
In line with these reports, Zimmerman said, “Early indications are that Boxing Day and the week following were strong for jewellers, but as January has progressed, this has slowed. I think we can expect to see this pick up again in the weeks prior to Valentine’s Day, and we’re predicting moderate growth across the board for the remainder of the year.”
Forecast for 2016
Zimmerman said the ARA was expecting a “mixed bag” for both jewellers and the general retail industry in the coming year – a sentiment the buying group leaders echoed.
“I think we have been in a new retail environment for a few years now, with consumers being regularly ‘spooked’ by bad news in Australia and around the world,” Pocklington said. “They stop spending for a few days, then realise they haven’t been directly affected and start spending again – until the next bad news event.
“The result is sales trends that are hard to predict ... That said, I think overall retail jewellery sales will end up in line with 2015 or maybe slightly up,” Pocklington concluded.
Webb said retail conditions were still challenging and that it was important to set clear business strategies this year. “Just filling stores with more and more brands is not doing anyone favours … so concentrating on the core part of the business while committing to a selected few brands to really promote them and do them better than most will be the key,” he advised.
Zarb agreed that 2016 would probably not be a “fairy tale year or a walk in the park”.
“We’ve got the disciplines in place and it’s very much going to be back-to-basics retailing, but I’m still expecting 2016 to be strong year for us [Leading Edge],” he said.
“As a group we’re going to have a lot of growth, but it’s important to have that multi-channel offering – a digital offering paired with traditional bricks-and-mortar retailing.
“At the end of the day, the stores that are able to capture this [multi-channel retailing] and do it well will no doubt succeed in 2016.”
Nationwide represents more than 500 jewellery stores across Australia and New Zealand, while Showcase and Leading Edge represent about 260 and 185, respectively.
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