Cost-of-living pressures cause for concern for jewellery retailers

Cost-of-living pressures cause for concern for jewellery retailers - Artificial Jewellery

Major retailers and small independents alike have expressed concern about consumer spending trends.

Despite discretionary spending continuing to slow the Australian Bureau of Statistics reported that consumers spent more than $35.2 billion in April, a 4.2 per cent increase on a year-on-year comparison.

Australian Retailers Association CEO Paul Zahra said that during a cost-of-living crisis, sales could be expected to decline.

“Cost-of-living pressures are the greatest current concern for retailers and their customers and this continues to affect retail sales – a trend we expect to see continue in the coming months,” Zahra said in a statement.

“While the numbers are still positive – the slowdown in retail spending is certainly already in effect and when you factor in price increases these results are having an impact on margins.

“Year-on-year spending on household goods continues to decline, but this also reflects the bumper trading in this category during the pandemic years.”

Michael Hill International has reported a 3.5 per cent decline in sales for the second half of the financial year.

According to the company, third-party transactional data for the total Australian retail jewellery segment has shown a double-digit decline in sales for the first four months of the second half.

“Despite the more challenging market conditions and the resulting impact on many retailers, I’m encouraged by the Michael Hill performance, as we continue to take market share in our category,” CEO Daniel Bracken said.

“Looking forward to 2024, I’m energised by the pipeline of strategic initiatives that underpin our aspirations for the group.”

Retail Edge’s latest assessment of more than 400 independent jewellery stores revealed sales declined by 2.3 per cent in May on a year-on-year comparison.

This softening of sales came off the back of an 11 per cent decline in April.

More reading
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Michael Hill and Bevilles: A tale of opposing branded watch strategies
Shock takeover: Michael Hill acquires Bevilles
Michael Hill celebrates record first-half revenue
Double digit increase in sales for Michael Hill


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