The BRC’s latest Retail Sales Monitor shows like-for-like sales have now fallen in seven of the last eight months. Eighty-five per cent of consumers believe they are feeling the impact of the recession and are reining in their spending.
Whilst the half-term week didn’t provide an accurate indication of market performance for the remainder of the year, as is generally the case, the toy market came out of year-to-date October 2008 registering no growth over YTD October 2007 sales. And while the market remained flat in value, in units, however, it has seen a five per cent growth over last year’s figures.
This increase in units sold comes as average prices have dropped five per cent for the year-to-date October 2008, to a low of £6.11 at the beginning of the festive period. As at year-to-date October, retailers cashed in a total of £995 million, with November likely to take the sales over the £1billion mark (NPD Epos YTD Data 2008).
With the grey economic skies looming above, it seems inevitable that the recession will take its toll on the toy business. The YTD was flat in sales, and October declined four per cent, but all the same six super categories grew in sales compared to last year, which is helping to drive the toy business forward.
The biggest growth still lies with building sets, which is up 21 per cent for the year to October. This is followed by plush and vehicles, amongst others. Building sets, driven by the whole Lego Star Wars Range, is not the only category to be benefiting from the growth of the Star Wars licence. Action figures and accessories has also found success with the licence – and with the increasingly popular Ben 10.
Infant/ Preschool is showing signs of growth driven by the strong performance of the In The Night Garden property, as well as Peppa Pig, which has conquered the hearts of the young children.
On the properties front, sales have been led by the boys characters, whilst the girls sales are being upheld by In The Night Garden and High School Musical, both strong in the Top Ten licences list. Dora the Explorer has also shown determination in these tough times, with registered growth in the Infant/Preschool as well as the dolls category.
It is with great anticipation that retailers and manufacturers, likewise, await the outcome of the final weeks trading up to Christmas. With the Government’s drop in VAT, plus retailers’ promotional activity to encourage consumers into stores, it is hoped that consumers will eventually come out to spend their money. As we head into December, hopefully the Christmas spirit will help turn things around.