US Toy Industry Sales Rise Amid Inflation • The Toy Book

New toys from Hasbro, Mattel and Magformers on display at a Costco in Illinois this month. | Source: James Zahn/The Book of Toys

by Juli Lennett, Vice President, Industry Advisor, American Toys, The NPD Group

After two years of record growth in 2020 and 2021, US toy industry dollar sales increased 2% or $231 million to $11.4 billion from January to June 2022, according to The NPD Group. . Unit sales decreased 6% and average selling price (ASP) increased 8% to $11.30. Although growth so far so far this year has been somewhat muted, it comes after sales increased 18% in 2020 and 20% in 2021. Looking at the compound annual growth rate (CAGR) on three years from 2019 to 2022, toy industry dollars grew 13%, driven by PEA growth of 11%, while units grew 2% over the same period.*

Across the 13 general merchandise categories tracked by NPD, the toy industry gained 0.3 points of consumer wallet share year-to-date to June 2022, underscoring the resilience of toys during a period of ‘inflation. Additionally, buyer penetration increased by 0.1%, resulting in a gain of approximately 155,000 buyers in the first six months of this year. Buyer penetration has been virtually flat all year – which is positive, as it suggests the industry is maintaining the substantial increases in new buyers of recent years. Overall, the toy industry saw an increase of almost 16 million buyers compared to 2019.**

Performance Supercategory

Four of the 11 supercategories tracked by NPD have shown growth so far this year. Compared to 2019, 10 supercategories posted a positive three-year CAGR. Outdoor and sports toys continued to be the largest supercategory with sales of $2.7 billion. Plush had the largest dollar gain of $301 million and the fastest dollar growth of 43%.

Key Properties and Key Growth Drivers

In the Plush supercategory, the Squishmallows, Magic Mixies and Disney brands were the main growth drivers. Squishmallows had seven of the top 15 selling toys for the entire toy industry since January-June 2022.

Exploration and other toys increased by 28%. Licensed products from the National Basketball Association, National Football Association and Major League Baseball led the category’s growth as trading cards continue to be hot.

Action figures and accessories also recorded double-digit growth. With the release of the film Jurassic World Dominion in June, the Jurassic World property saw the strongest growth, followed by Funko Pop! and Sonic The Hedgehog, which also hit theaters in April. Finally, building sets grew by 8%, with LEGO Star Wars generating the strongest growth, followed by LEGO Creator Expert and LEGO Technic.

Year-to-date consumer insight for the first half of 2022

Using NPD’s proprietary payment data, three key consumer insights were identified for the current year in June 2022.**

  • Adults without children in the household have overtaken households with children. Households without children increased by 4%, while those with children only increased by 1%.
  • Households with an income above $100,000 increased by 6%, while households with an income below $50,000 decreased by 2%.
  • Consumers take fewer trips to buy toys and buy fewer toys per trip, but spend more money overall. The trend of taking fewer trips and buying fewer toys is driven by consumer behavior in physical stores, while in the online channel, consumers take more trips and buy more toys per trip, resulting in stronger digital growth.

Look forward

There is no doubt that we are going through a period of economic uncertainty. As we emerge from the pandemic, the realities of inflation, the potential for a recession, and the unpredictability of the geopolitical climate continue to challenge the retail landscape. The good news is that the toy industry has always been resilient during times of recession.

Given the headwinds mentioned above, it is clear that the next six months are far from predictable. However, if the pandemic has taught us anything, it’s that during times of economic uncertainty, parents will prioritize their children’s happiness above all else. And while I predict changes for the industry over the coming year, it’s worth bearing in mind that sales are up 45% year-to-date from June 2019.

  • *Source: The NPD Group/US Toys Retail Tracking Service, January-June 2022
  • **Source: The NPD Group/Checkout/American Toys

This article originally appeared in the September 2022 Fall Toy Preview edition of The toy book. Click here to read the full issue!

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