Did retail discount Olympic toys too early?

Sales top £6.4 million but suppliers upset by some stores cutting prices early.
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The Olympics was a mixed bag for the industry as toy sales eclipsed Moshi Monsters – but only after aggressive discounting by retail. 

In the week before the Games' opening ceremony, Olympic toys were the top licence in terms of sales value, ahead of Moshi Monsters and Spider-Man. 

Olympic toy sales reached £6.4 million (NPD Epos covering 78 per cent of toy sales) up to July 28th, and NPD predicts Olympics merchandise will reach around £15 million at retail by the end of the year.

But several senior sources have told ToyNews that certain retailers slashed the price of official licensed London 2012 toys, by more than half their original RRPs, well in advance of the ceremony.

“I have found working on the Olympic project to be incredibly exciting, but it is very sad that so many retailers across the board started discounting their Olympic stock before the London 2012 Games had even started,” said She Who Dares founder Rachel Lowe MBE, who produces the Destination London board game.

“This I know for a fact has been a huge blow for a lot of licensees, with many having to go to clearance houses.”

Alex Balzaretti, project manager for the London 2012 range at Hornby, added: “Given the unprecedented nature of an event such as this, and the opportunities and their associated risks, there were bound to be retailers who didn’t quite get it right.”

However, retail says it had no choice but to slash prices to drive sales.

“We saw literally no demand prior to the start of the Games, and during the week of the opening ceremony, we half-priced all of our stock, as did many of our competitors,” said The Entertainer’s buying director Stuart Grant. “This really started to drive sales.

“Subsequently we have had a phenomenal two weeks of trading, but all at very deep discounting. The big question is: how long will sales continue? We have a lot of stock left.”

Independent toy retailers had contrasting opinions. Some, such as Ellenbray and The Hub Direct, praised Lego’s Team GB Minifigure range after it sold out, though the former said some lines “were a disaster”. Others avoided stocking Olympics toys entirely.

“I felt the risk was way too high,” commented A1 Toys owner David Burns. “It was only a two-week window of sales, with every other retailer in the country trying to get a bit of the action. Most of Amazon’s top ten toys are Olympics items, the vast majority of which are selling for less than half-price and have been since the second day of the Games.”

But suppliers are confident sales of the toys will continue throughout the year.

“Celebrations of Team GB look to continue in the near future, certainly in the run through the Paralympic games and up to Christmas 2012,” said Balzaretti.

Golden Bear’s commercial director Barry Hughes added: “We anticipate that consumer demand will continue for Pride the Lion in the coming months as is the perfect icon to remember Team GB’s great achievements,” he said.

And MV Sports sales and marketing director Phil Ratcliffe said that the firm had made enough sales to recoup its guarantee, which “was a significant amount”.

NPD’s UK toy director Jez Fraser-Hook expects toy sales to be discounted again in the weeks following the Paralympics, to shift any leftover stock.

Frédérique Tutt, European Analyst for the toy market at The NPD Group, said initial sales are positive. 

"The fact that UK consumers were buying Olympics merchandise before the opening ceremony had even begun, or visitors had started to arrive, was a reflection of just how much the UK had been behind the Olympics," she said.

"Now that the Games are in full swing, the amazing level of sales for Olympic merchandise illustrates the fantastic spirit to the Games and indicates that they have lifted consumer confidence and boosted part of UK retail, at least for a short period.”

Meanwhile, the British Retail Consortium said the Olympics 'failed to inspire spending' at UK retail in general.

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