As gold prices soar to record highs this festive season, jewellery retailers are walking a fine line between optimism and caution. While the surge in gold rates has tempered large-ticket purchases, retailers say festive demand is holding steady, driven by gold exchange offers, lightweight collections, and an increasing tilt towards studded and lab-grown diamond jewellery.
On October 9, 24-carat gold touched Rs 1.24 lakh per 10 grams, adding to the challenges jewellers have faced since mid-year. “We faced a choppy period from April 21 to September 21 due to high gold prices. Overall volume sentiment was weak. However, the onset of Navratri improved customer sentiment,” Ajoy Chawla, chief executive officer of Titan’s jewellery division, told Fe.
With Dhanteras approaching, retailers have rolled out offers to spur buying, including discounts, gold exchange schemes and investment-oriented purchases. Paul Alukkas, managing director of Jos Alukkas, said many customers are showing interest in gold coins, bars and exchange programmes. “We are optimistic of renewed buyer sentiment during Dhanteras, but we expect customers to make smaller and more conscious purchases,” he said.
Titan, which operates the Tanishq brand, has seen a sharp rise in gold exchange volumes this season. “Typically, 35-36% of our sales come from gold exchange programmes. This season, it’s up to 38-40% for non-Tanishq gold. By the end of Diwali, we estimate gold exchanges will touch 50% of our sales,” Chawla said.
For larger chains, the outlook remains buoyant despite the price pressure. “Despite steep gold prices, we are optimistic of healthy double-digit growth in sales for Dhanteras and Diwali compared to last year,” said Joy Alukkas, chairman and managing director of Joyalukkas India. “Our advanced booking scheme has encouraged early purchases, while discounts and exchange benefits on old gold have resulted in robust demand among customers,” he added.
However, smaller jewellers say the impact of record prices is more evident at their counters. Upen Vyas, shop floor manager at Jewel Plus, said many buyers continue to adopt a wait-and-watch approach. “Customers are hesitant to buy gold, but the rising prices have shifted demand towards lab-grown diamonds. We have seen a 70% rise in LGD sales because of their affordability and perceived value,” he said.
The shift is also visible among legacy players. Senco Gold & Diamonds managing director and CEO Suvankar Sen said diamond jewellery has gained ground as gold prices surge. “In Q2, our diamond jewellery sales grew 13-13.5%, while overall sales rose 6.5%. In Q1, diamond jewellery had grown 40-50% in value. Clearly, studded jewellery demand is picking up,” he said.
Sen added that inventory stocking patterns have changed as well. “Sales have improved by nearly 60-70% this month compared to September, but upstocking is down 30-40% from previous years,” he noted.
Retailers are also betting on lightweight and lower-caratage designs to attract cost-conscious customers. “While festive demand remains strong, 22k and 18k jewellery are the preferred choices,” Ramesh Kalyanaraman, executive director of Kalyan Jewellers, said. “We expect robust footfalls across major markets owing to healthy pre-bookings and new festive collections,” he added.
As the season gathers momentum, retailers hope sentiment during Dhanteras and Diwali will sustain demand, even as customers tread carefully.