It’s time to go! Toy Industry Revenues and the Holiday Rush • The Toy Book

When was the last time you saw a Walmart action aisle look like this? | Source: James Zahn/The Book of Toys

You can practically hear the sleigh bells on the horizon, and in just two months – as expected – Santa Claus will be coming down the chimneys to deliver toys and games to children around the world. Of course, old Kris Kringle won’t be the only one spreading joy throughout the season as families come together to celebrate a host of holiday traditions.

In retail, holiday preparation is in full swing, and if stores aren’t ready yet, they’re already behind. After all, despite the annual mid-August arrival of the usual “Christmas Creep” claims by some consumers (spoiler alert: that’s nothing new), the company’s seasonality is returning to its pre-pandemic form.

According to the latest data from the National Retail Federation (NRF) and the US Census Bureau (which track sales using different methodologies), retail sales in September were essentially flat compared to August, but increased by one year to the next. The NRF reports a 7.2% spike from a year ago, while the Census reports a 9.4% spike. While inflation is certainly a factor in driving some numbers higher, consumer foot traffic appears strong.

Toy departments are stocked

In my own store checks, warehouse clubs including Costco and Sam’s Club seem to have a slightly wider assortment of toys this season, and pallet shippers were installed and released in mid-September.

Over the past week, I’ve had the opportunity to stop by several different Walmart and Target stores and have seen healthy inventory levels and solid pricing across the board. At the Target locations I visited, toys were starting to overflow into adjacent departments with excess inventory placed on overhead risers. One change over the past month is that stock levels appear normalized from the late summer weeks in which I noted very different Target merchandising, including overstocked toys stacked on pallets in main aisles at discounted prices in a few stores.

The big surprise was Walmart.

While they have the volume, store-level merchandising and restocking is a notoriously mixed bag that few seem to publicly admit. Over the past few years, the stores I’ve visited have always been ripe with empty pegs and haphazardly filled shelves. More alarmingly, it hasn’t been uncommon to see a brand new product go straight into the clearance aisles as store associates apparently use the country of yellow and black signage as a catch-all for anything that hasn’t. no shelf label yet or is already full in its usual place.

At the Toy Association‘s 2023 preview in Dallas last month, I discussed this off the record with a few different companies who admitted to seeing sales pop up with clearance prices at random Walmart stores in some cases even before that an item is supposed to be on the shelves. Just a week before the show, I personally saw Super Impulse’s new Minis-in-Minis in a Walmart clearance aisle in what was to be the line’s first market launch.

My visits to Walmart stores revealed a shock: they actually look good (see top photo).

Beyond the masses, independent toy stores are gearing up for Neighborhood Toy Store Month, presented by the American Specialty Toy Retailing Association (ASTRA) and Toyland opened at farm chain retailers, including Blain’s Farm & Fleet and Fleet Farm on October 15. , October 15 was also the official opening date for Toys “R” Us at Macy’s.

Results season + some rumblings

Hasbro kicked off the third-quarter earnings season last week with disappointing but not unexpected numbers, though the company is sticking to its full-year guidance. This week Mattel and Jakks Pacific will check in followed by Funko and Spin Master next week. So far, all indications point to more positive news than Hasbro reported for Q3.

On a more interesting note, it looks like news of some mergers and acquisitions is pending.

Over the past few months, there have been rumors and rumors about several private toy and game companies quietly exploring sales options. Sources tell me that a deal is already in place and we could see an announcement as early as next week. Meanwhile, another company (a leader in its field) keeps popping up in the conversation, so it’s only a matter of time until someone pulls the trigger and makes a purchase. It should be noted that none of them are among the upcoming acquisitions that Funko hinted at during its recent Investor Day.

To borrow from the great Orson Welles, “there will be no wine before its time”. That said, it’s definitely not my place to talk about anything until the time is right, but feel free to speculate if you must!

About Lola C. Chapman

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