With the crucial Easter sales period looming, the trade is readying itself for the first test of its durability since the demise of Woolies and the deepening of the economic crisis.
According to NPD’s Consumer Panel, last year’s Easter purchases totalled £48m. With Easter falling later this year the trade would normally expect an increase year on year, but few are forecasting an overall upward trend.
“If we can match last year’s industry figures we will have done extremely well,” said Entertainer MD and TRA chairman Gary Grant. “But anything north of £45m and we’ll all be very pleased. For the first time in ten years the independents have an opportunity to capture new customers and they can be captured on range, not price.”
Toymaster product selector Paul Reader added: “The Easter pick up for independents is not usually as good as it is for the majors. They have other categories that they can promote and sell a few toys on the back of it. We have a much better time if the weather is kind to us.
Members tend to fill the stores with lower price points and try to keep in stock some of the key selling brands and ranges whenever a school holiday occurs. We tend to find that if you’re ready you can take advantage of the extra footfall.
“This Easter is sure to be different as most of our members UK-side have benefited immensely from the closure of Woolworths, it would appear that the majors are still attempting to put in place a strategy to take some of Woolies £385m toy sales.”
Grant is optimistic that the later Easter will also benefit sales, adding: “I think it’s a year of opportunity, not just to see how recession-proof the industry is. We are low ticket retailers with most product under a tenner but the other opportunities are that Easter is later than last year so it’s likely to kick start summer a little better. But it will also be the first time we’ve had a school holiday without Woolworths, so it’s a real chance to see what the industry is like post-Woolies.”
Suppliers will also be watching how the market performs with extra interest, and expectations have been tailored accordingly.
David Allmark, Mattel’s UK MD (pictured), said: “As an industry it is true to say that we have been going through a period of re-setting the retail landscape following macro-economic challenges and local retailer changes. I am not too sure that we are yet at a point to say we now see the shape of the graph for the future, but for sure post-Easter is an opportunity for everyone to take a breath and compare where the consumer spending pattern is emerging, outside of the Woolworths disruption from the Christmas season of 2008.
“Ultimately the strength of the brand and the marketing programmes suppliers invest in will determine the robustness of the industry. To ‘toot our horn’, the Barbie 50th celebration is a great example of committing to a year-long programme of excellence and scale in times of uncertainty and securing retail aligning with our partners, resulting in driving consumer demand. The uptake of the integrated activity is fantastic and proves that we are still a vibrant industry if we continue to innovate.”
Jerry Healy, marketing director of Character Options, says retailers are looking more carefully at the support available for products.
“Easter has always been a key selling point in the first half of the year and is a real barometer of just how well the industry is doing,” he said.
“Everyone is a little more cautious. But where the marketing plans stack up the commitment is there. I doubt if we will see the same number of campaigns on TV as last year though. It’s a case of hedging bets I think.
“Without doubt this is the first opportunity to see where we really are. My gut feeling is that we’ll be Okay. Everyone was a little nervous and unsure before Christmas, but the toy industry is not going to disappear and retail sell-through is still strong.”
Hasbro’s marketing director, Mark Foster, added: “Easter is the first real test of the market since the downturn. It’s clear that the toy market is not recession-proof – we are all just wrestling with how recession-resistant it will be.
“The recession and the Woolies effect are inter-twined in the UK. The market in other European countries is not being affected by the downturn to anything like the same degree. So while we are not seeing a spontaneous surge of former Woolworths customers taking their custom elsewhere, how suppliers and retailers reshape their ranges and plans for the spring will make all the difference in how we turn this situation around."