The report predicts that the market will be down in 2008 and highlights games and puzzles, construction toys and action figures as the sector's best performing lines.
Exclusive data from the report will appear in ToyNews. The document also includes the following summaries:
● The UK market for toys and games is large and robust, estimated to be worth nearly £2.2 billion in 2007, which is up by 22% in real terms on 2003. Nevertheless, Mintel has estimated a year-on-year drop to £2.1 billion for 2008 and, although this may prove to be too pessimistic, economic conditions in particular were already dampening sales.
● New product introductions have been a vital component in growth as always. In addition, and very probably as a result of growing pressures on household income, traditional games and toys with proven appeal have been much in demand throughout 2008. Rubik’s Cube, Scrabble and Monopoly are all among predicted bestsellers for Christmas.
● Overall, the strongest-performing sectors are construction toys, games and puzzles, vehicles and action figures, while arts and crafts and outdoor games are holding steady. Again, perceived good value may well play a part here.
● Licensed products continue to grow in importance and are estimated to account for around a third of the market. In 2007/08, major names include In the Night Garden (first and foremost in its impact), Pirates of the Caribbean, Indiana Jones, Batman, Transformers and High School Musical.
● The toys and games market is highly fragmented with the largest companies surrounded by hundreds of others, often specialists in sectors such as wooden toys, puzzles, crafts, educational toys and games, plush and models.
● The larger players include – in alphabetical order – Bandai, Character Group, Crayola, Flair, Hasbro, Leapfrog, Lego, Halsall, Hornby, Mattel, MGA Entertainment, Tomy, Vivid Imaginations, VTech and Zapf Creations.
● More channels of distribution are opening – greater competition for the toyshops to be sure but also offering opportunities. Consumers have more opportunities to buy, for instance online and through supermarkets.
● And, very importantly, the internet brings opportunities to small manufacturers and retailers to grow their sales. Its very convenience may also bring incremental growth to the market as a whole.
● There are too many positives for this not to be a strong and enduring market, most importantly the fun of toys, kids’ urge to collect and parents’ desire to give their children pleasure and help them learn, all reinforced with the major influence of licensed characters.
● Even so, the market faces challenges – most immediately from tougher economic conditions, and secondly from competitors for kids’ time like console games and social networking. Manufacturers need to promise and deliver good lasting value as a priority in their product development and promotion.
● Real and soundly based growth over the longer term is still achievable despite this market’s already large size if manufacturers focus on quality and innovation that is responsive to kids’ wants.
● An over-reliance on licensed brands is not a stable base for product development or growth.