According to a survey by the Nielsen Company, 85 percent of U.S. consumers believe their country has already entered a recession. One third of those polled named the economic situation as their top concern over the nearest six months.
The survey also says U.S. consumer confidence plunged 17 points from the second half of 2007 to the first half of 2008.
As reported, while government officials express hopes that George Bush’s tax rebate plan will give an impulse to the economy, the respondents in the survey said they were using the money toward debt rather than shopping.
In fact, 69 percent of U.S. consumers believe the next twelve months are either a “bad” or “not so good” time to buy things they want or need. Once they have covered essential living expenses, 41 percent reported that they use spare cash to pay off debt, credit cards or loans. 36 percent are putting extra funds into savings. Nearly 24 percent of consumers say they do not have any spare cash.
According to Nielsen’s research, just 21 percent are using extra money for home improvements, while 19 percent are opting to plunk down money on out-of-home entertainment or holidays and vacations. Shopping sprees rank low on their list of priorities, with mere 17 percent buying new clothes and 10 percent splurging on new technology. Some 11 percent planned to put extra money into a retirement fund, while nine percent reported that they would invest in shares of stock or mutual funds.
Despite the recession, weak sales during the holiday season and inflation-centric forecasts, analysts believe 2008 will see a 3-percent rise in U.S. jewelry sales. According to the World Diamond Bourse forecast, jewelry sales will increase due to buoyancy in the wedding segment of the jewelry business. In terms of money, the jewelry sales turnover will reach USD 65.9 billion to USD 64 billion last year.
Based on many articles circulated in recent months and anyway related to the recession problem, it may be concluded that for many consumers and manufacturer recession there is, although it has actually not affected the upper levels of the jewelry segment. Some representatives of the haute couture jewelry essentially disagree with those saying recession may affect their affluent clientele. According to journalists, such mood particularly prevailed at the Couture Exhibition preceding the JCK Las Vegas Show. Some jewelers told the IdexOnline correspondent that they were not going to cut their gold jewelry inventories since “this was no problem” for their customers. At the same time, the results of this exhibition, according to the IdexOnline correspondent, were ambiguous. Even more conspicuous was the recession influence right on the scene of JCK Las Vegas. The exhibition halls looked less crowded than last year. Almost all exhibitors said the attendance of their stands dropped. The number of “spontaneous” visitors was substantially lower and they were more reluctant to make orders.
The greatest success was enjoyed by everything free from diamonds and gold, but charged with original design at affordable prices.
So tilted is the market these days that many retail jewelers are pushing hard the other way - buying from customers, as well as selling, The Philadelphia Inquirer says. And if the diamond market is any indication of the overall economy, average people with smaller diamonds are struggling far more than the well-heeled with big rocks.
“There is a softening in the market for diamonds under a carat because those people need food and shelter and are not so concerned about buying a diamond right now,” said Larry Rosenberg, of the family-owned diamond wholesaler Rosenberg Diamond Co.
So far, however, despite their blaring advertisements and offers of high prices, retailers say people with diamonds are reluctant to sell. “People are attached to their diamonds,” Ezra of Forever Diamonds said. “They might change the ring, but the diamond remains the same.”
Rather than emotionally charged diamonds, it is mostly gold and silver that people look to sell to either jewelers or at trade shows.
“This year, it’s the big stones - three carats and larger - that are bringing very strong prices because that’s what the rich want,” Rosenberg said.
In the last year, only the prices of top-quality, clean and white gems have gone up substantially - as much as 10 percent - while prices for other stones rose much less.
“So instead of buying five small stones, I’m down to maybe one or two bigger stones for the same dollar that I was looking to invest,” Rosenberg said.
Jewelers are relying on wealthier customers to get them through.
“People would rather have a bag of diamonds than a bag of dollars,” Rosenberg said, “because dollars can go up and down and a diamond is accepted worldwide.”
Whatever the explanation, figures reflect a tendency common for all retailers: sales are growing in luxury stores, MarketWatch writes. The same is with large discounters, such as Wal-Mart, which released its better-than-expected first-quarter results.
So where is the recession?
It hit the mid-price range retailers – like Macy’s, whose shares dropped 37% over the year or J.C. Penney’s (- 39%).
In many respects, this shows the current state of the middle class which buys at Costco Wholesale trying to save some cash for a Tiffany bauble in a hope to live to the end of the month.
