Toy industry grapples with supply chain issues ahead of busy holiday shopping season

Ahead of the Paw Patrol movie release this summer, Toys “R” Us Canada and toy maker Spin Master Corp. have done something rarely seen before in the toy industry.

They airlifted Liberty toys – the latest member of the animated search and rescue team – from China to Canada to put the new puppy on store shelves in time for the film’s premiere.

“We really wanted Liberty to be available to our customers when the movie was released,” said Katrina Fyfle, Toys “R” Us Canada Brand Manager. “It’s one of the ones we put on a plane in partnership with the seller.”

This unusual step highlights the continuing difficulty of operating in the midst of a pandemic and the resulting labor shortages, escalating material prices, rising shipping costs and long delays.

It also foreshadows what the toy industry could be facing this holiday season, a time that accounts for up to 70% of all toy sales for the year by some estimates.

Industry experts say toy makers and retailers are bracing for a potentially tough run until Christmas this year and are offering some advice for consumers: buy early, don’t expect big explosive sales, and most importantly , find a good hiding place until the holidays to deter children from snooping.

“The supply chain problems are not going to be corrected this fall,” Canadian Toy Association spokesperson Andrew Wagar said in an interview.

“There will be items that sell faster than usual and they will be restocked more slowly than usual.”

The toy industry group says there will always be toys on store shelves, but recommends consumers start holiday shopping as early as October to avoid being disappointed with potential shortages of certain items in the store. holidays are approaching.

While retail toy prices are expected to remain stable or increase only slightly, Wagar said buyers may notice fewer door crash deals as toy manufacturers and retailers face increasing pressure on the costs.

“I wouldn’t describe it as a price increase as much as a decrease in toy discounts for the holiday season,” he said. “We anticipate that these types of sales will not be as prolific or as drastic as in previous years.”

But the price increase depends in part on the toy company and where the goods are made, Wagar said.

Smaller toy makers are more likely to take advantage of the cash shipping market, which in the past may have been a cheaper option, he said. But growing demand for cargo space has pushed up spot market prices 500 to 800 percent.

“A container that would have typically cost $ 3,000 is now selling for $ 24,000,” Wagar said.

“The big toy companies have more items, more brands, more money, and probably better shipping deals than the small toy companies. You’re going to see small toy companies probably suffer more than big toy companies.

Claire Hutchings, co-owner of independent toy store Dilly Dally Kids in Vancouver, said almost every vendor they work with increased their price list this summer – some for the second time in a year.

“Prices are definitely increasing much more than anything we’ve seen in the past,” she said. “The cost of plastic resins has also gone up and the base cost of wood has become a banana. So we know it’s not about price increases.”

The toy store has absorbed as much of the price increase as possible over the past two years, but will likely have to pass on some of the higher costs, Hutchings said.

“It was the tipping point,” she said. “We still won’t increase our prices if we can handle it, but in some cases we may have to. “

As for inventory, Hutchings said she started ordering six weeks earlier than normal for the holiday season.

“We are seeing a decline in inventory availability in all areas,” she said. “It’s rare that I place an order and get 100 percent of it. To mitigate this, we bought early so that our warehouse is currently really full. “

But that’s unlikely to last, as wait times to restock sold-out items are unpredictable and new orders placed in the coming months are unlikely to arrive until the holidays, Hutchings said.

Fyfle with Toys “R” Us said the store is still waiting for some of the toys that are expected to be popular with kids this year.

These late-arriving goods could benefit last-minute buyers, but she said if buyers see something in stock now, it’s best not to wait.

This report by The Canadian Press was first published on September 29, 2021.

Brett Bundale, The Canadian Press

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