The upcoming holiday season in the United States is expected to witness a decline in jewelry sales as consumers divert their spending toward other categories, as outlined in a forecast by Mastercard SpendingPulse.
Between November 1 and December 24, Mastercard projects a year-on-year drop of 0.3% in revenue for the jewelry category. Strikingly, out of the five spending categories considered, jewelry emerges as the sole category anticipated to experience a decline in sales.
Michelle Meyer, the US chief economist for the Mastercard Economics Institute, commented on the shift in consumer behavior, stating, “While the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back. We expect these individuals to impressively navigate the holiday season, making choices and trade-offs that best suit their lifestyles.”
It’s worth noting that spending during these two months will also be influenced by an unfavorable comparison with the same period in the previous year. During that time, inflation led to a significant price surge, consumers had accumulated excess savings, and there was a substantial pent-up demand, all of which contributed to an exceptional year for sales, Mastercard pointed out.
Despite the projected jewelry sales decline, the overall retail spending is expected to increase by 3.7% year-on-year. E-commerce is predicted to rise by 7%, while in-store purchases are forecasted to grow by 2.9%. The electronics sector is poised for the highest growth at 6%, driven by a return to school and a shift towards upgrading home offices as people revamp their digital workspaces, as explained by Mastercard. Apparel sales are expected to progress by 1%, while restaurant spending is set to increase by 5%, according to the estimates.
Steve Sadove, senior adviser for Mastercard, emphasized the importance of a tailored approach to meet consumer needs amidst a plethora of choices and tightening budgets, stating, “With numerous choices and tightening budgets, you can anticipate shoppers to be increasingly selective and value focused. We expect the most effective holiday strategy will be to meet consumers where they are — personalized promotions to in-store experiences will be key in doing so.”
