Total retail sales of jewellery and watches in the UK grew by 1.8% in 2010 to be worth £4.64bn. For the purposes of this Key Note Market Report, the jewellery sector is segmented into two categories: real jewellery (gold, silver and platinum); and fashion/costume jewellery.
The recent upturn in the market in 2009 and 2010 after 2 years of negative growth is attributable to a slight recovery in the economy and consumers investing back into the luxury market. Certain sectors of the market have seen different growth rates over the last 12 months, in particular the watches sector, which alone increased by 8.5% in 2009. Trends imply that, although consumers have started investing in the jewellery market, there is much division between the sectors, with the actual sales of real jewellery having experienced a small increase in terms of value, while cheaper fashion alternatives have seen a high rise in sales. Overall, the trends indicate that, despite the fact consumers have started spending in the industry, they are still conscious of prices, often opting for cheaper alternatives to real jewellery.
Increased competition in the market over the last few years has left the future uncertain for some smaller, independent companies, as the large retailers dominate with lower-cost branded goods. The Internet and online stores have also created further competition. Price comparison sites also indicate the cheapest version of products, which are more often than not offered by the larger retailers as opposed to the independents.
The significant increase in the price of gold over recent years has also affected sales in the UK market, with the higher cost creating problems for both consumers and retailers. However, a positive trend in the jewellery market has been attributed to the contribution the wedding market is making to sales in the jewellery industry. It has been reported that, despite the economic climate, most couples are unwilling to compromise on the quality of wedding bands and engagements rings. The wedding market has also widened over recent years, with bridal jewellery and gifts becoming common items for a wedding. Despite this, figuresstill imply that fewer people are getting married, which will put some decline on the industry overall in the long run.
The market for jewellery and watches in the UK is expected to see continual growth as the economy continues to recover, with consumers becoming more spontaneous with their spending, as seen before the recession. Key Note forecasts that sales of jewellery and watcheswill continue to grow in the next 5 years, with sales peaking at £5.32bn in 2015.