Executive Summary

The UK jewellery and watches market was worth £2.96bn in 2000. Sales have been on an upward trend since the mid-1990s as consumer spending in the economy has continued to rise. However, the increasing level of competition in the luxury goods sector has meant that growth has been steady rather than spectacular.

Within the jewellery market, there has been a slight shift towards higher gold caratage and an increase in the popularity of platinum. The real jewellery market benefits from association with engagements and weddings, as well as being a popular gift purchase. However, a rise in the self purchase of items has been the among the most important developments.

The market for jewellery and watches is very fragmented with a large number of suppliers and retailers. However, there are also global brands with matching promotional budgets, as well as strong international trade bodies supporting the trade and its products. Since the late 1990s, there have been considerable levels of corporate activity in the sector as companies have sought to build market share through acquisition rather than focus solely on organic growth. The retail sector has also seen ownership changes.

Consumer spending for jewellery and watches tends to be concentrated across the lower price ranges. Annually, few consumers pay over £50 for a watch, or over £100 on jewellery. This indicates that, despite strong branding, more expensive makes have a considerable way to go in terms of market penetration.

The jewellery and watches market is likely to see a continuation of the upward sales trend in the medium term. In the jewellery sector, the continued growth of branding and strategies, such as gem certification, is likely to boost demand. The trade up to better quality pieces, including higher sales of platinum, will also move the price range upwards.

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