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Cost-cutting Aussies still love jewellery
Cost-cutting Aussies still love jewellery
Posted June 08, 2010 |
A new report shows Australian consumers are willing to reduce their spending in a number of areas – just don’t ask them to stop buying jewellery.
The “Economic Insights” report by CommSec was released last Wednesday, revealing consumer spending trends during the first three months of 2010.
Among the findings was an impressive 10.3 per cent rise in sales of jewellery, watches and clocks, compared to last year.
The economic recovery would usually explain such a large jump, yet sales data from other industries tells a different story.
Spending in a number of other industries decreased during the same period; tools and equipment was down 6.7 per cent while air travel (4.4), gambling (2.5), books and newspapers (2.1) and cigarettes (0.8) all suffered.
"Aussie consumers have been shunning spending on non-essential or discretionary items in response to constant interest rate hikes from the Reserve Bank," Commsec's chief economist Craig James noted in the report.
Yet even essentials like doctors and medical services (3.8 per cent) were down against jewellery.
James’ report could not offer any explanation for the large increase, writing only: “Interestingly Aussie consumers have been lashing out on some ‘little luxuries’”.
Appearing on ABC News, James offered one possible explanation pointing out “the higher Australian dollar pushing down the price of those goods”.
Georgini director Gina Kougias, whose brand is stocked by more than 300 Australian retailers, disagreed with James’ comments.
She said while Georgini’s sales had increased in the past year, the brand’s prices had “remained steady”.
Kougias suggested the increased spending might be due to more fashion jewellery brands entering the market.
“I think our range is a bit more ‘fashion’, so it’s considered to be affordable luxury. It’s a little extra that consumers can buy themselves without breaking the budget,” she said.
Nationwide Jewellers managing director Colin Pocklington had his own theory, saying consumers were shifting their spending away from other industries and into jewellery.
“People have chosen to spend more money on jewellery at the expense of other industries like shoes, fashion apparel and accessories,” he said, adding, “the popularity of jewellery brands like Pandora have taken-away sales from other markets”.
James’ advice to retailers during the downturn in spending was to keep prices low.
“The only way you’re going to get people to spend is to keep down the prices of your goods or to offer significant discounts,” he said.
Kougias again disagreed, saying, “I don’t think discounting prices is really the way to go.”
She said jewellery retailers had plenty of alternatives before choosing to discount.
“Add value to the sale by offering a gift with each purchase,” she said.
Kougias also stressed the importance of “the customer service experience”, saying, “it keeps people coming back. I think building up a client base is more important than constantly discounting.”
Other improvements identified by the report were explained in part by the government’s tax breaks for small businesses. Computers (34.3 per cent) and cars (9.6) both enjoyed healthy boosts.
The report by CommSec was based on unpublished data provided by the Australian Bureau of Statistics.
It follows the release of a string of positive retail results last week, which included strong Australian sales for high-end jewellery retailers Tiffany & Co and Cartier.
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