Watch and jewellery sales in Australia are forecast to rise from $3.77 billion in 2011/12 to $4.05 billion in 2015/16 but store numbers are likley to fall, according to IBISWorld.
The company’s recently released Watch and Jewellery Retailing in Australia report predicts that retail sales from 2012 to 2015/2016 will be driven by continued growth in the domestic economy and a rise in income levels as well as “the introduction of new jewellery designs and fashion pieces”.
“However, industry sales will continue to be influenced by the strong levels of competition both within and external to the industry, along with a surge in demand for jewellery repairs rather than replacements."
The report also predicts that in the next five years the watch and jewellery market will become “increasingly dominated by existing operators as they expand their store network”.
“The number of enterprises operating in this industry is forecast to increase by 1.2 percent per annum with competitive pressure and ageing sole proprietors leading to further contractions in non-employing operators.
“In general, the industry will experience a consolidation of operators at the chain store levels and the demise of ‘ma and pa’ stores.
“Continuing high rent costs will also result in fewer stores over this period.
“There will, however, be room for the speciality or niche operator at both the upper or lower end of the market, with operators at the upper-end of the market able to offer unique pieces of jewellery that can be marketed on the basis of quality, individuality and service rather than price.
“Given the continued price competition, it is expected that the small independent operators will find it increasingly difficult to compete with the larger, more efficient chain stores and buying groups resulting in increased concentration within this industry.”