In his latest blog, industry analyst Edahn Golan isn't sugarcoating the message, the diamond industry is suffering as the pandemic is exacerbating the long-term downward trend of polished wholesale prices as well as the steep decline in jewelry share of wallet.
Retailers in the US are no longer stocking up on goods, and demand only happens against direct consumer orders, and the jewelry business shrank nearly 15% in the first half of 2020. In the jewelry share of wallet statistics, Golan sees consumers are not necessarily buying less items, but they are not willing to spend as much money on each item as they were in the past.
Golan concludes; "Diamond traders may blame lack of financing, high rough diamond prices, or limited government support, but that is not what is stalling the diamond business. At its most fundamental, diamonds are a consumer product. If the diamond industry forgets to tend to consumers, all the bank financing and favorable tax regimes won’t help the diamond business one bit."