Report: Jewelry Market competition on rise as growth slows

After enjoying a 6 percent growth rate in 2004, the U.S. jewelry market grew just 3.87 percent to $59.4 billion in 2005, a slowdown that has led to a more heated rivalry among retail jewelers, a new Unity Marketing Study finds.

Signs are that the retail market for jewelry is going to get even more challenging in the immediate future as market saturation begins to set in, the report says.

"With the jewelry market slowing, consumers are going to be unforgiving if retailers fail to meet their expectations. That is what happened this past Christmas season, when Zale Corp. attempted to move their flagship Zales Jewelers' brand from a mid-market jewelry retailer to a higher-priced, more fashion-forward brand," said Pam Danziger, president of Unity Marketing, in a press release announcing the study.

Disappointing sales allowed Sterling Jewelers to step in and surpass Zale in U.S. sales last year, she said. (Sterling surpassed Zale Corp. for the No. 2 spot on NATIONAL JEWELER's $100 Million Supersellers list this year.)

Contributing to "turmoil in the jewelry retail market," the report says, are rising prices for gold and platinum, and consumers' ongoing quest for bargains, which they readily find at discount outlets such as Costco and The Jewelry Exchange.

For more on the study, visit www.unitymarketingonline.com.