Revenue suffers as tough times discourage spending on luxury goods
London, United Kingdom (PRWEB) September 07, 2012
The performance of the Jewellery & Watch Stores industry is closely correlated with the state of the overall economy. The items are considered to be luxury goods and demand is reliant on the level of disposable income and consumer confidence within the economy. In poor economic conditions, consumers reduce their purchases of luxury items and consequently, the industry suffers. This has largely been the case in the industry over the past five years.
As the economy went into recession, unemployment rose and overall household income declined. According to IBISWorld industry analyst Temitope Onabanjo, “consumers were more cautious with their spending and reduced their consumption of luxury goods, particularly the more affluent buyers who account for the largest proportion of industry sales”. An increase in competition from department stores that produce fashionable and cheaper items and attract a wider range of customers has been an important trend over the past five years. Retailers need to meet the fashionable demands of consumers to ensure they remain competitive and achieve growth. Revenue generated by the industry is expected to decrease by 0.8% annually over the five years through 2012-13, to reach £3.93 billion. This will include a decline of 1.7% in 2012-13.
As the UK economy recovers, the industry is expected to improve. Onabanjo adds, “retailers will benefit from an increase in household income and a subsequent increase in consumer spending”. A rise in the use of technology, with particular emphasis on e-commerce applications such as retail websites and mobile phone applications, will help to boost sales in the industry and cater to increasingly internet-friendly consumers. New products and new markets will potentially boost sales for retailers with an increase in demand for unique products. Falling prices of precious metals such as gold and silver will translate into lower costs for retailers and improve industry profitability. Over the next five years through 2017-18, industry revenue is expected to return to growth.
IBISWorld estimates that the four largest players in the Jewellery and Watch Stores industry control 26.4% of the total market. There is no one player that has the scale, and therefore the ability, to dominate the entire market. This means the industry has a low level of concentration. Major companies include Signet Jewelers Limited and Aurum Group Limited.
For more information on the Jewellery & Watch Stores industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
The companies that participate in this industry specialise in selling jewellery and watches to the general public through speciality stores and retail outlets. They also sell clocks, silverware and other gift items. Jewellery sold through department stores and other non-specialist stores is not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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