Sector Insight: Toy retailing

The Early Learning Centre has an 8% share of the toy market
The Early Learning Centre has an 8% share of the toy market

Toy stores are facing increased competition from supermarkets and online retailers as the sector fights back after the recession.

Whether it's Diablo or Buzz Lightyear, Gogo's Crazy Bones or Puffles, each year a different craze sweeps through the nation's playgrounds, with an inevitable impact on toy retailers. However, while these fads happen all-year round, the toy retail market has a clear peak sales period -the final quarter of the year, leading up to Christmas.

In 2008, the country was in the grip of recession, and one particular toy retailer, Woolworths, felt the full force of the economic downturn, falling into bankruptcy and disappearing from our high streets, although the brand name does survive online.

Many argued its positioning - having a product selection that ranged from kitchenware to toys and sweets to CDs - was outdated. As £1 shops took up residence in Woolworths' abandoned stores, toy-shoppers boosted the market share of its rivals; Argos and Toys 'R' Us both increased toy sales in the wake of its demise.

By 2009/2010 the sector as a whole was starting to recover and even tip into growth (increasing an estimated 5% in 2010), taking the UK value to almost £2.2bn, according to Mintel.

In addition to the recession, the focus on price that has gripped the market has also had an impact on value. Discounting and special offers have become a mainstay of the competition between retailers, despite toy imports from places such as China rising in value.

Nonetheless, the structure of the market is changing, as toy specialists have felt the full weight of competition from supermarkets and internet retailers. Online stores in particular gain from being able to stock greater toy ranges compared with the limited shelf space of high-street shops.

Although catalogue shopping has fallen off considerably in some sectors, it remains buoyant in toy retailing: 24% of toy and games buyers look through catalogues before purchasing, according to research by Ipsos MORI. Almost a third say that being able to browse a catalogue at home would attract them to a particular retailer. This compares with 29% of toy- buyers using the internet to compare products and prices, and 16% saying they often buy toys and games online.

Generally, toy shopping is a mixture of planned and impulse buying, although pester power is alive and kicking in this sector, as any parent will testify. Children are strongly influenced by ads, films and TV shows, as well as peer pressure. The influence of TV and movies means that licensed products form a major part of the toy industry.

Educational toys, meanwhile, are popular among adults - more than half try to buy them, and sets such as Lego and Playmobil, which can be expanded over time, remain firm favourites (27% of adults like them).

Toy specialists made up an estimated 42% of the market in 2009 (up from 37% in 2007), according to Mintel. Among the specialists, Toys 'R' Us leads the pack, followed by Early Learning Centre, which has a different proposition from its rival. Argos and Tesco were the biggest non-specialists in the sector. According to Ipsos MORI, 32% of adults have shopped at Argos in the past 12 months, followed by Toys 'R' Us and Tesco.

Meanwhile, in a bid to generate footfall, retailers and toy manufacturers are joining forces on promotions. These have included Toys 'R' Us and Nickelodeon Consumer Products on the Dora the Explorer product assortment; Hamleys and Learning Curve's Chuggington toys, based on a CBeebies pre-school series; and a Mighty Beanz promotion in Entertainer stores (the biggest independent in the sector).

The projected growth of the child population over the next five years is set to be a boost for the sector. The under 14-year-olds group is predicted to increase 3% between 2010 and 2015, with the biggest rise in those up to the age of nine.

By 2015, the market is expected to be worth £2.5bn, up 13% on 2010, according to Mintel. When inflation is accounted for, however, this is a decline of about 14% over the period.


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message