Have Watches Really Become That Much More Expensive? — A Closer Look At Facts And Figures
Nowadays, almost all new watches presented get comments about their prices. “A very nice watch, but not for that price” is a frequently heard comment, not only by our readers but also by Fratello’s editors. But is criticism like this justified? In relative terms, have watches become much more expensive than, let’s say, 20 years ago? Or do our minds still live in an era long gone?
It is a tricky question to answer because of the complexity with which a price is determined. Therefore, I won’t be able to give anything more than a general indication. And to get such an indication, I decided to look at the last two decades, from 2003 to 2023. What happened during this period with watch prices, inflation, consumer price index, and salary development? But, in addition, what happened product-development-wise, both technically and in terms of perception and relevance? While technical developments are difficult to place a value on, the values of perception and relevance are impossible to determine. These are so personal and seem to have changed between generations. So while we can be aware of them, these factors do not fit into the simple calculations this article will be based upon. This article only aims to examine the bigger picture, and the details will be left to your imagination.
Have brands increased their prices too much?
Based on information from Europe, I looked at the price of 26 watch models. They’re all watch models that were available in 2003 and are still available today in a more or less equal execution. Of course, some models, technically and design-wise, have changed more than others. I will explain that details have changed between the old and new models but also assume some general knowledge and understanding on your end. If things aren’t clear or need extra explanation, please do not hesitate to use the comment section below the article.
Consumer price index
Besides the prices of watches, I looked at the consumer price index (CPI). The CPI is a good indicator of inflation and represents changes in the prices of all goods and services purchased for consumption by urban households. User fees, such as water, electricity, and sewer service, as well as sales and excise taxes paid by the consumer are also included. Between 2003 and 2023, the CPI in Europe was approximately 1.55. This means that for a compilation of products and services that cost €100 in 2003, that same package would cost €155 in 2023, a 55% markup in 20 years.
I also looked at the difference in average income over the past 20 years. We now know that, on average, products and services became 55% more expensive. Unfortunately, the average income over that same period didn’t keep up. In 2003, the average gross income was €28,500 per year, and in 2023, it is €40,000. That is an increase of only 40%. It seems that, on average, people in 2023 will have 15% less spending power than in 2003. That is not to say that this directly affects the purchase of watches, but I thought it was nice to mention it anyway.
Explaining the calculation
Let’s start with an example to explain how the calculations are made and what the respective values, digits, and numbers mean. First is the 2003 consumer list price of the watch in the EU. We used prices from Germany and the Netherlands, which were the most accessible and good references. This figure is multiplied by the 2003–2023 CPI of 1.55 to show how much that amount would have been today. Next up is the list price of that same watch model in 2023. And of course, we all know that watches have evolved technically, so the older and current ones will not be the same products. It’s up to you to decide what these technical developments are worth. However, the fact remains that if you want to buy a new Omega Speedmaster Professional now, you will likely pay the current list price. And I compare that amount with what you had to pay if you purchased that Omega 20 years ago. Although the watch has slightly changed, you’re still buying an Omega Speedmaster Professional. If you want to buy a specific watch now, how does its price relate to if you had bought it 20 years ago?
Explaining the spreadsheet
The first column loosely indicates the watch brand and model, while the second column shows its list price in 2003. The third column [CPI corrected 55%] indicates the virtual value of the 2003 list price in 2023. The fourth column shows the list price of the same watch model in 2023.
The fifth column is a blank spacer, so in column six, we see the absolute price increase (in euros) of the watch in 2023 compared to 2003. This is not very interesting as it does not reflect the inflation that has happened in the last 20 years. Then, the seventh column shows this increase as a percentage. The eighth column is more interesting because it shows the relative increase in the price of a watch, taking into account its current list price and comparing it to the now-relative value of the list price in 2003. It is shown as a percentage increase in column nine.
The last three columns, with figures in blue and red to determine them from the 2003 and 2023 list prices, are more of a bonus. These figures do not represent the increase in list prices over the last 20 years. Instead, they show the increase or decrease in the value of a watch bought in 2003 compared to the approximate current value. In other words, if you had bought that watch in 2003, could you make money with it today, or did it decrease in value? After the blank tenth column, column 11 shows the approximate current value. Column 12 shows the actual rise or fall of the watch’s value, while column 13 indicates it as a percentage. These figures could help answer the question of whether watches generally made for a good investment in the last 20 years.
Clarifying the results
Of course, watches have become more expensive over the last 20 years. This is understandable since everything has become more expensive, hasn’t it? In general, things are 55% more expensive than they were 20 years, as the CPI indicates. But even considering this CPI of 1.55, all watches have become more expensive. From the above list of watches, with an increase of 9%, the Breguet Classique 5907 increased the least. And the list price of a Patek Phillipe Nautilus increased the most by 352%. Admittedly, the Patek has changed way more than the Breguet, but at the same time, I’m not sure if the development of the Nautilus has improved the watch in all areas.
As mentioned, almost all watches have evolved technically over the last 20 years (indeed, not all of them), so most watches will not be precisely the same product. Let’s assume that these developments caused a quality and price increase and were not only created to make the production of the watch more economical. Then it’s up to you to decide if technical and aesthetic developments are worth the price increase. Or maybe, meanwhile, there is something else — a change in relevance? — that justifies the price increase. The point remains that if you want to buy a specific watch model now instead of that one 20 years ago, you’ll have to pay an often severely greater amount of money.
So have watches nowadays become so much more expensive to us than they were 20 years ago? Yes, indeed they have, without any exception or offense to watch brand or model. Big brands like Omega and smaller brands like Sinn all increased prices of their watches way beyond the general inflation. This is true even if some didn’t change much technically. Considering that the average income didn’t keep up with inflation, decreased spending power is an additional setback.
Still, the question of whether brands have increased their prices too much has to be answered with “no.” Obviously, this is not the case because many brands seem unable to keep up with the demand for their products. Production capacities have increased throughout the watch industry while some brands still sell everything they can produce. So, in the end, is it our fault that watch prices have increased so drastically? Have your say in the comments.