Early NPD figures point to Christmas sales increase

Sales for the nine weeks to December 4th 2010, account for increase of five per cent year-on-year.
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Despite a difficult economic background and poor retail sales in the UK early last month, NPD is optimistic about the solid growth recorded since the beginning of the year and believes the UK is well-placed to regain its place as the largest toy market in Europe.

The first two weeks of October showed a sales increase of more than 20 per cent on the same period in 2009.

November, which represents at least 15 per cent of annual toy sales, started slowly. The first two weeks were well below the trend recorded since the beginning of the year, with the first week's sales at -1 per cent and the second showing a growth of just two per cent.

However, the second half of the month experienced a market boom, with retail toy sales up by eight per cent in week three of the month and a further five per cent in the week ending November 27th.

NPD analysts believe adverse weather in the first week of December kept many shoppers indoors and led to a two per cent decline in that week, compared to the same period last year.

Sales for the nine weeks from October to December 4th 2010, also account for an increase of five per cent, compared to the same period in 2009.

NPD believes the result puts the UK toy market well ahead of analysts’ expectations of a one per cent growth for non-food retail sales for the year.

It also confirms the strong growth trend recorded from the beginning of the year to the first week of December of nine per cent. NPD analysts believe the performance of the market has been boosted by retailer promotions and parents’ eagerness to ensure they have this year’s most wanted toys before stocks run out.

Frédérique Tutt, European industry analyst for NPD commented: "Around £900m is spent each year on presents for the under-11s. This year we are forecasting an increase of 5.5 per cent in the amount spent compared to 2009.

"That means parents will spend on average £52 and grandparents £34 per child this year, a significant amount given the economic climate of austerity and spending cuts.

"Despite being a challenging year, we are confident about December sales and expect multi-channel retailers to do well with their online sales, which have already reached a fifth of the annual sales for the whole of 2009.

"There are also signs that the industry feels comforted by the strong average prices recorded in the first week of December for the top ten best sellers, which are six per cent ahead of last year. It’s a clear indicator that parents are happy to pay a higher price for good toys."

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