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David Brown

The Jewelry Slump Just Ended




Was it all about the election?

Election uncertainty is over and it seems a lift in confidence from the result has carried across to the performance of the stores in our data group. 

November represented the first month since April that has seen positive growth in the 12-month rolling sales figures. The increase of 0.27 percent was due to an increase, from October’s annualized average sales figures of $1,582,758 to $1,586,972 at the end of November. 

The six months to October saw annualized sales decline from $1,630,093 to a low of $1,582,758, a decline of almost 3 percent. This would be the equivalent of a 6 percent drop in sales over a full 12-month period. Although not as large as previous declines recorded, the continuous nature of successive declines was definitely a pattern that needed to be broken.

So was it all about the election? On the surface the data would seem to indicate it was a factor. The decline started from around the time that the two main party candidates were selected and continued through until the election result was determined. This may be a simplistic explanation, however. The best comparison would be to look at the data relative to a similar situation. Fortunately we have information now from the run in on two previous elections to compare with.

A quick comparison between 2008, 2012 and 2016 shows the following change in rolling 12-month sales figures as a percentage averaged across all stores. Negative numbers indicate a drop in sales:

2008 was the last election in which a sitting president wasn’t seeking re-election, so this represents the last comparable election scenario. Odds do favor a president seeking re-election, which creates greater certainty for the economy in terms of the outcome, even if that president isn’t considered “good for business.” Only Jimmy Carter and George H.W. Bush have failed to be re-elected since World War II so it seems a president seeking re-election does create a little more market certainty in the eyes of consumers.




Looking at the numbers above, we can notice a similarity of performance between the 2008 and 2016 elections — in both cases where a new president had to be chosen. 2008 suffered from four declines in sales performance during the six months prior to November, but this was further compounded by the beginning of the Great Recession, the impact of which can clearly be seen in October and November as the economy unraveled and both Bear Stearns and Lehman Brothers collapsed.

By contrast, the run-in to the 2012 election seems to show very little impact on the economy. In the lead-up, the incumbent Barack Obama held a clear lead in most polls and ended up winning 332 of the Electoral College votes. Other than a brief narrowing in October, most polls seemed to be showing a clear advantage for Obama, which translated into an election win. The performance of the store data seems to reflect the strong feeling of certainty in the outcome that consumers had, regardless of which candidate they preferred.

If we’ve learned one thing from elections this year, however, it’s not to trust polls! This year showed a surprisingly high negative reaction in sales data in the lead-up to the election. Despite polls consistently pointing towards a victory for Hillary Clinton it seems voters knew better and weren’t so sure. 


Obviously there are more factors to affect the economy than just the elections. 2008 was a case of an economic slide after the election certainty had occurred but this was obviously down to more than just politics.

So which election year had the most positive (or as the case may be the least negative) impact on the economy? 2012 was clearly the better performer economically with an increase in sales of over 5 percent during the six months from May to October. Second however was 2008. Ignoring November, store sales data showed a decline of 1.18 percent between May and October of that year. The biggest drop was 2016, with store sales dropping by 2.94 percent over the May to October period.

So can we expect, all other things being equal, a decline in economic performance in the six months leading up to a new president getting elected? Three lots of data are not enough to be conclusive, and we’ll leave you to be the judge, but it certainly seems that not all elections are doomed to have a negative impact on store performance, and the performance of sales may have more to do with the certainty of the outcome than which candidate gets elected.

David Brown is president of the Edge Retail Academy, an organization devoted to the measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact [email protected] or phone toll free (877) 569-8657.


This article is an online extra for INSTORE Online.



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