Growing consumer sentiment and disposable incomes will favorably affect jewelry demand
Los Angeles, CA (PRWEB) May 28, 2012
Stagnant levels of household wealth, high unemployment rates and unclear economic conditions resulted in low disposable income levels in the five years to 2012. With less discretionary spending money available, American consumers cut back on their purchases of luxury goods, including jewelry and watches, according to IBISWorld industry analyst Justin Waterman. Retailers' revenue subsequently declined, which caused them to reduce inventory traditionally purchased from jewelry and watch wholesalers. As a result, the Jewelry and Watch Wholesaling industry's revenue suffered from falling downstream demand, declining at an average annual rate of 1.1% to $44.1 billion over the five years to 2012. However, as downstream demand increases, revenue rises. Revenue grew 1.2% in 2011 and is expected to rise another 2.3% in 2012.
In addition to weakened downstream demand, wholesale bypass – when manufacturers sell directly to downstream buyers - further decreased revenue in the Jewelry and Watch Wholesaling industry, Waterman said. Over the five years to 2012, discount retailers and supercenters like Walmart and Costco have become more willing to purchase directly from manufacturers and omit the wholesale intermediary to achieve higher cost savings. This reduced the number of supply contracts available to wholesalers and reduced industry profitability. Profit margins are expected to drop during the five years to 2012, forcing weak wholesale operators to exit the industry. As a result, the number of enterprises is expected to fall from 30,751 firms in 2007 to an estimated 25,329 in 2012.
Led by growing downstream demand, the wholesaling industry is forecast to grow in the five years to 2017. Growing consumer sentiment and household disposable incomes will encourage consumers to spend on industry items that they had delayed buying during the recession. In addition, rising import levels will likely strengthen the role of wholesalers as distributors. This incentive will boost industry demand as retailers turn to wholesalers to replenish their inventories. Through 2017, revenue is projected to increase. For more information, visit IBISWorld’s Jewelry & Watch Wholesaling in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Operators in this industry wholesale fine jewelry, costume jewelry, watches, clocks, precious metals and metal flatware, precious and semiprecious stones, silverware, and jewelers' findings. This industry does not include the wholesale of precious metal ores or flatware made of non-precious metal.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.