Report: Luxury Jewelry Spending Up

There’s growth in jewelry spending among luxury consumers, but it is lagging when compared to other areas of luxury spending, according to a recently published report.

Average transaction size for luxury jewelry by U.S. consumers increased by 10 percent, while transaction volume increased 2 percent for the second quarter, year-over-year, according to the American Express Business Insights Q2 2010 Spend Trends Report.

The report (which covers April, May and June transactions) notes that overall spending on jewelry increased 20 percent in April, then began a steady decline to 10 percent in May and 3 percent in June, the smallest increase in the past eight months.

Meanwhile, overall luxury retail spending increased by at least 9 percent, according to the report.

“It appears that while other luxury retail categories are flourishing, consumers are shying away from jewelry spending in the summer months,” according to the report.

The report tracks luxury retail spending in furniture and home furnishings, apparel and accessories, jewelry, and department stores. Home furnishings performed the strongest—despite a weak housing market—suggesting that homeowners are focusing on their current interiors until the real estate market improves, according to the report.

The report also tracks spending in the food and entertainment, and travel sectors, as well as spending trends by region.

Those defined as “ultra-affluent consumers” increased their spending for the second quarter by 24 percent in quick service restaurants, compared with a 12 percent increase in fine dining spending. In addition, business travel increased by 63 with the ultra-affluent group spending 114 percent more for the front of the plane.

By region, the city of San Francisco as a whole increased overall spend by 36 percent in the second quarter across all categories, higher than Chicago, Los Angeles and Miami. Meanwhile, New York posted a 3 percent decline in spending.

Luxury Consumer Confidence and Spending Rise

The outlook for the luxury industry is improving, according to luxury research and marketing firm Unity Marketing. The firm’s measure of affluent consumer confidence, the Luxury Consumption Index, improved by 4 points to reach 76.1 for the first quarter 2011. 

"The uptick in this quarter's LCI reveals a more positive outlook among affluent consumers about the economy at large, as well as increased optimism about their personal economic situation," said Pam Danziger, Unity Marketing president. "Affluents backed up their growing confidence by spending 4.1 percent more on luxury goods and services in the fourth quarter as compared with the same period last year."

Luxury categories that posted strongest growth year-over-year as measured by the average amount spent by affluents, included: Kitchenware and housewares (including food processors, juicers, espresso machines), electronics (such as high-end televisions and digital book readers and travel (luxury cruises).

"While we may not see the boom times of 2003-2007, the current LCI shows an increase from the previous quarter, and may signify that the recent bump in retail demand may be sustainable,” said Tom Bodenberg, Unity Marketing's chief consumer economist. “Closer analysis reveals that despite a noted reduction of market pessimism, this has yet to fully translate into increased demand."

The latest luxury consumer survey results are published in Unity Marketing's Luxury Tracking Report 1Q2011 -- The latest report on what luxuries affluents are buying and how much they are spending.  The survey was conducted January 6-13, 2011 among 1,237 affluent luxury consumers (average income $308,700; median net worth $861,000; age 43.9 yrs; 42 percent male and 58 percent female).