The Toy Association Monitors Holiday Sales Results & Retail Bankruptcies
December 4, 2018 | The Toy Association continually monitors multiple sources of information on sales, financial metrics, and market status to gauge the state of the U.S. toy industry. The holiday shopping season brings a wealth of reports, especially about major brand sell-though and overall retail performance. What follows is a brief synopsis of recent reports we’ve received.
YTD U.S. Toy Sales
Following news earlier in the year that the U.S. toy market was up 7 percent, in a November 8 press release, The NPD Group stated that the U.S. toy industry sales to date were up 2 percent or $264 million, for the first nine months of the year over 2017, reaching $11.6 billion. This is a smaller increase than 4 percent which the toy industry saw for the full year 2017 compared to 2016. NPD stated that the increase was a “welcome surprise” considering all that is going on in the industry this year.
Thanksgiving Weekend Sales
With Thanksgiving and Black Friday behind us, how did the toy and retail industry perform?
There appears to be a consensus among informational sources that multichannel/omnichannel retailers – those with strong digital and retail presence – performed the best over the initial holiday sales period. According to the National Retail Federation, more than 165 million Americans shopped either in stores or online throughout the weekend, surpassing estimates. Top purchases over the weekend included apparel, toys, books and video games, electronics, and gift cards.
Data tracking overall retail sales pointed to in-store sales declines, yet strong increases in online sales. According to RetailNext’s initial report sales at brick-and-mortar stores declined 4 to 7 percent over Thanksgiving and Black Friday, with foot traffic down between 5 and 9 percent. ShopperTrak reported that in-store visits were down 1 percent. Adobe Analytics reported online sales rose 28 percent on Thanksgiving and 23 percent on Black Friday, supporting the theory that sales so far have been shifting from brick-and-mortar stores to online.
Other toy industry sources report:
- One source indicated toy sales were down double digits for the first two weeks of November. According to that source, toy sales during the week of Thanksgiving (excluding Cyber Monday) fell an additional mid-single-digit percentage at brick-and-mortar stores, while online sales increased by double digit percentages.
- Another source was not impressed with Amazon’s toy business over Thanksgiving weekend.
- Other sources reported the push to increase toy shelf space at several retailers achieved mixed results, with some reports indicating inventory management at several mid-size retailers was not well managed in terms of presentation and/or inventory management, leaving gaps in products and lightly-stocked shelves possibly because of concerns by retailers hedging on sell-through and being cautious not to become stuck with inventory post-holiday.
Overall, there is some newfound caution and concern about the ability of retailers to absorb all of Toys“R”Us’ fourth-quarter sales.
Elsewhere, the Sears Holding Corp. bankruptcy continues to be of great concern to members still selling to the company. While the majority of our members believed they are managing the issue, some members did express their terms and percentage of total sales to Sears Holding are worrisome. Recent news of financial restructuring at Nordic toy-selling powerhouse Top-Toy underscores uncertainty and turmoil in global retail.
The Toy Association continues to maintain information on the status of proceedings related to Toys“R”Us and will continue to provide information and resources on Sears and any other developments elsewhere in the retail community.
Business risk and sustainability as well as the swiftly-evolving retail and ecommerce space will be core issues discussed at The Toy Association’s Annual Business Conference. The 2019 conference is being planned in collaboration with Target and will be held in Minneapolis from June 18 to 19, 2019. Further details and registration information for the Annual Business Conference will be available in January.