THE INSTORE JEWELERS Confidence Index slumped close to its historic low in early March as jewelers showed increasing unease about the prospects for the rest of 2020 amid a global health scare that is threatening to cause widespread economic disruption.
The index, which is based on jewelers’ short-term outlooks and their inventory purchases, fell into negative territory with a reading of 44. That is only one point above the JCI’s all-time low of 43 and below the critical 50-point mark, signaling more jewelers are currently bearish than bullish about business.
The decline in the index mirrors the Dow Jones Index’s slide into a bear market and an unrelenting string of news headlines about the spread of the COVID-19 virus and its impact on the economy, including disrupted supply chains, alarmed consumers and the cancellation of trade shows.
The deterioration in sentiment comes as jewelers continue to post strong sales numbers. According to our most recent Brain Squad survey, 23 percent of jewelers reported that their sales were Way Up (up 25 percent or more) in February over the same month in 2019 and a further 32 percent said they were Up, although to a lesser degree. Twenty-three percent said they were Unchanged, while 16 percent reported they were Down and 7 percent said Way Down (down more than 25 percent).
Looking more deeply into the JCI data, many jewelers say they remain confident about the outlook for their stores but they are clearly scaling back orders. Twenty-eight percent of the surveyed jewelers said the short-term outlook for their business had improved recently versus 24 percent who said it had deteriorated (while the rest said it hadn’t changed). Nearly half, or 44 percent, however, have cut back their inventory orders compared to only 23 percent who have increased them.
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Our most recent Brain Squad survey, taken between Feb. 1 and Feb. 11, attracted responses from just over 200 independent jewelry store owners across the United States and Canada.
