Jewellery and watch retailers reported an increase in sales volumes in February 2025, according to new data from the Office for National Statistics (ONS). The sub-sector was identified within the ‘other non-food stores’ category as having contributed to monthly growth, with retailers attributing the rise to increased consumer demand for gold during a period of economic uncertainty.
This performance formed part of a wider 3.1% increase in non-food store sales volumes, which includes department stores, clothing, household goods, and other non-food retailers. Monthly retail sales volumes in February were at their highest level since July 2022, following a 1.4% increase in January.
Economic Conditions Influence Jewellery Spending
Retailers in the jewellery and watch sector noted that the rise in gold purchases may be linked to consumer behaviour influenced by concerns about inflation and financial uncertainty. While the ONS did not provide a separate breakdown for jewellery sales, watches and jewellery were specifically highlighted as performing well within the broader category.
The data suggests that jewellery sales, particularly gold items, may be influenced by economic conditions and consumer perceptions of stability.
Mixed Performance Across the Retail Sector
Total retail sales volumes rose by 1.0% in February 2025 and were 2.2% higher than in the same month last year. However, volumes remained 0.4% below the level recorded in February 2020, prior to the COVID-19 pandemic.
Household goods stores saw the strongest month-on-month increase of 6.8%, led by hardware retailers. Clothing sales volumes also rose, though not enough to recover from a 2.7% fall in January. Food store volumes declined by 2.0% over the month.
Nicholas Found, Head of Commercial Content at Retail Economics, commented:
“February brought mixed fortunes for retail, sensitive to seasonal events and discounting. While Valentine’s Day offered a lift to traditional gifting categories such as fragrances, the wider picture remains challenging. Consumer confidence is fragile, the cost-of-living continues to dominate household concerns, and retailers are bracing for a wave of rising operating costs from April.
“Shoppers are laser-focused on promotions and essentials, deferring bigger-ticket purchases as inflation’s bumpy path back to target has ingrained a value-driven mindset. Promotional activity is no longer a tactical lever – it’s becoming a structural retail strategy to drive non-essential sales.
“From next week, retailers are staring down the barrel of a triple threat, including rising minimum wages, increased National Insurance contributions and higher business rates. This cocktail of costs will squeeze already thin margins and risks triggering job losses, hurting investment and accelerating store closures. For many retailers, the challenge now is how to absorb these costs without alienating price sensitive consumers.”
Online Spending Increases, But In-Store Remains Important
Online retail spending rose by 3.3% in February compared with January, with 26.5% of all retail sales taking place online, up from 25.8% the previous month. While online jewellery sales are growing, in-store shopping remains important for higher-value purchases, where customers typically seek consultation and product assessment.
Seasonal events such as Valentine’s Day may have supported gifting-related sales in categories including jewellery, though no specific breakdown for this was provided.
Cost Pressures Ahead for Retailers
Jewellers will encounter rising cost pressures from April 2025, including National Insurance increases, higher business rates, and a higher National Living Wage. Kris Hamer, Director of Insight at the British Retail Consortium, said:
“While the rain clouds may have gone away, retailers face £7bn in new costs in 2025. Furthermore, the uncertainty around the Employment Rights Bill and the new business rates reform mean that retailers are hesitant to invest in new stores and jobs.”
These added costs may impact margins in the jewellery industry, particularly given exposure to material and labour costs.
Implications for Jewellers
The February data indicates that jewellery demand remains resilient, particularly for gold, as economic uncertainty shapes consumer behaviour. Retailers may need to review inventory, pricing, and customer engagement as they adjust to changing trading conditions.
While the wider retail environment remains unpredictable, the jewellery sector’s performance in February reflects its continued relevance to consumers navigating a complex economic landscape.
