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Toy sales are falling as stores chase Christmas moods

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Manufacturers and retailers hope that interactive toys will prove popular

Customer attention in the UK has led to a difficult year for toy retailers as parents look for deals and reduce impulse purchases.

Sales of toys in the UK have fallen by 8% so far compared to the same period last year, leaving retailers to dream of Christmas bumper.

But the economic uncertainty and planning of Brexit may lead to a shortage of the most popular toys.

Others can be sold cheaper if sales fail to meet the expectations of retailers.

About 30% of annual toy spending comes at Christmas, with £ 86 spent on a typical child up to the age of 11, according to NPD analysts.

The industry is banking on holiday sales. An 8% drop in UK sales was worse than a 3% drop in international toy sales, said Fredrik Tutt, a global NPD industry analyst. Last year's sales were also flat, indicating more than a seasonal decline.

She said this was driven by a lack of consumer confidence and problems in the high street in general, rather than by issues specific to the toy industry.

Parents and grandparents made fewer impulse purchases outside of birthdays and Christmas, in part because they were more likely to be in stores.

"You don't get the same thrill of Willy Wonka on the internet as kids do in a toy store," said Gary Grant, who chairs the committee that selects the DreamToys list for the 2019 must-have game.

Blockbuster movie releases were awarded this year as the savior of the industry this year as a result of sales of spin toys, which make up 10% of the market. The two brands that previously broke records for licensed movie products – Star Wars and Frozen – will see new films released before Christmas.

But Mr Grant said the financial reality for many families is that buying a toy after watching a movie will be a substitute for another toy purchase, not necessarily an additional one.

Toy facts in the UK

  • In-store sales accounted for 55% of the market, with 26% purchased online and shipped, and 16% click and collect
  • Almost two-thirds (61%) of spending Christmas toys were gifts chosen by the provider rather than being put on children's lists
  • Christmas toy consumption averages £ 86 per child up to 11 years of age
  • Each receives an average of eight toys each Christmas

Source: NPD

Overall, licensed products accounted for 23% of toy sales this year, but Ms Tut said the sector is no longer dominated by blockbuster releases.

Some of the hot toys this year have links to YouTube stars on YouTube and are being sold on social media. The fragmentation of entertainment channels makes it difficult for major movie brands to repeat previous successes – though some, such as Harry Potter – have had the joy.

"Kids are moving to the next thing very quickly, so there is a relatively short window of opportunity to make a sale," she said.

The Brexit effect

The additional planning required by Britain's potential to leave the EU on October 31 has led many manufacturers and retailers to make early orders by next Christmas.

That, according to Mr Grant, could mean a shortage of certain toys before Christmas that suddenly become popular. Careful approach by manufacturers can add to this concern.

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There are already suggestions for a surprise of L.O.L! 2-in-1 glamor

However, there is also the possibility of retailers ordering certain toys, leading to the potential for large discounts for those at some point before Christmas.

That, he said, would affect the money traders received, in addition to the extra time and expense of management throughout the year, which was triggered by Brexit planning.

He predicted a pickup in the UK economy and consumer confidence would make High Street shoppers spend money, but it was difficult to know when such an improvement would come.

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