In 1960, the average price for such a diamond stood at some ***** U.S. dollars. Since then, the diamond price has increased more than tenfold, to ****** U.S. dollars in 2015. Diamond prices: carats to dollars Diamonds are a carbon-based gemstone coveted by innumerable people worldwide. They are among the hardest materials on Earth (if not the hardest), which makes them very valuable for industrial uses in addition to their wide use in luxury jewelry. Diamonds are also expensive. The cut, clarity, color, and carat (weight and size) are the so-called four 'Cs' that dictate a diamond's price. One carat is equal to a weight of approximately *** milligrams, and cost approximately ****** U.S. dollars in 2015. Diamond prices per carat show a consistent increasing trend, while the annual rough diamond production worldwide has sat between *** million carats and *** million carats between 2009 and 2019. Impact of the diamond demand-supply gap on prices As the known global diamond reserves continue to be mined and depleted while the global demand for diamonds increases, a diamond demand-supply gap is expected to develop in the coming years. By 2050, there is a forecasted supply shortfall of some *** million carats of diamonds worldwide. This will likely cause the price per carat to continue increasing for natural diamonds. The production of synthetic diamonds, also referred to as lab grown diamonds, is a potential solution to the projected diamond shortfall. There was a steady production of between **** and **** billion carats of synthetic diamonds worldwide between 2007 and 2016. Synthetic diamonds also cost between ** and ** percent less than a natural diamond does, but not every consumer is willing to forgo natural diamonds in favor of a diamond that has been created in a lab.

Lab-grown diamonds are gaining an increasing share of the global diamond market each year, having accounted for ** million carats of the new global supply in 2023, compared to the *** million carats of newly-mined natural diamond supply that year. The lab-grown diamond supply is expected to further increase to over ** million carats in 2025. Lab-grown diamonds, also known as synthetic diamonds, have the same physical properties of natural diamonds because they are created in a lab using a process that replicates the natural diamond growing process, but takes weeks rather than billions of years.

Jewellery and watches aren't essential, so sales depend on people's confidence in the economy and how much they have to spend. Uncertainty surrounding near-term economic prospects has weighed on sales for jewellery and watches and price-sensitive consumers have reduced their spending on luxury goods. More affluent shoppers have sustained sales, as they are less susceptible to economic conditions. Steep inflation and economic uncertainty over 2023-24 constrained spending on luxury items. In response, retailers focused on international growth opportunities like Watches of Switzerland to increase its presence in the US market. However, improving economic conditions in 2024-25 have boosted the market. With consumer confidence hiking in 2024-25, shoppers are feeling more confident about spending, thanks to easing inflation pressures and better financial stability. Retailers can take advantage of this by offering exclusive product launches, personalised customer service and loyalty rewards. These steps help attract new shoppers and keep current customers coming back. Moreover, an increased focus on sustainability, driven by rising environmental consciousness, is transforming the industry. Key players like Pandora have adopted recycled materials and lab-grown diamonds, appealing to eco-conscious consumers. As macroeconomic conditions improve in 2024-25, the UK market is poised for renewed sales. Over the five years through 2024-25, revenue is projected to climb at a compound annual rate of 1.5% to £7.8 billion, with revenue set to inch upwards by 0.4% in 2024-25. The operating profit margin is anticipated to recover to 6.2% in 2024-25. Revenue is expected to climb at a compound annual rate of 0.7% over the five years through 2029-30 to £8.1 billion. Economic conditions are expected to stabilise in the coming years, supporting renewed spending growth and increasing demand for mid-range products. The future outlook for the UK Jewellery and Watch Stores industry will be shaped by growing online shopping trends and the perception of luxury watches as investment assets. Companies like Watches of Switzerland will enhance digital platforms to replicate in-store experiences. While demand for high-end brands remains strong, the industry faces authenticity challenges due to counterfeit crises from cheaper replicas, and rising gold prices will continue to create obstacles for many businesses in the industry.