Home Blog 2018 Holiday Landscape without Toys‟R”Us

The NPD Group Blog

Insights and Opinions From Analysts and Experts in More Than 20 Industries

The Holiday Landscape without Toys‟R”Us

Oct 1, 2018
Juli Lennett, Senior Vice President, Industry Advisor ;
Toys

A lot has happened in the last six months since the big announcement that Toys‟R”Us would be liquidating its stores in the U.S. Based on some of the news reports in mid-March, when this was first announced, you might have predicted that the sky would have fallen by now and the toy industry would be a shell of itself.

Well, that didn’t happen. Why not?

As I wrote in my blog back in March, NPD found that when parents bought a toy last year at Toys‟R”Us, over 70 percent of them were purchased for a specific occasion like a birthday or Christmas. In addition, 70 percent of toys purchased at Toys‟R”Us were purchased because kids asked for the specific toy or brand of toy. Even without Toys‟R”Us, Christmas and birthdays aren’t going away, and kids will continue to ask their parents and grandparents for their favorite toy and get it.

As we move into the most important time of the year when nearly 50 percent of all U.S. toy sales occur, the question is, what impact will the liquidation have on the U.S. toy industry’s holiday season? After all, parents bought a lot of toys during the 16 weeks of the liquidation and are hoarding them to give away at Christmas, right?

Well, yes, but to a small degree.

In a recent study that NPD conducted in the U.S., 83 percent of consumers who bought a toy during the liquidation at Toys‟R”Us reported that they already had or would give the toy away by the end of September. That leaves only 17 percent who reported that they would be giving the toy away some time in Q4. And, interestingly, the #1 occasion that the liquidation toys were purchased for was for a birthday. Christmas came in third place, behind “No Special Occasion.”

What does this mean to the toy industry in Q4? It’s pretty simple actually. Based on my estimates, pantry loading will have a negative impact of 1.4 percent on Q4 sales. In addition, we can expect to see about 20 percent of Toys‟R”Us sales simply evaporate. This translates to an additional negative impact of about 2 percent. The total negative impact on Q4 should be about 3.4 percent if everything else remains status quo compared to last year.

But, that’s the big question mark. Is everything going to remain status quo compared to last year?

I think the Toys‟R”Us news has re-energized the toy industry. Existing toy retailers are making bigger investments in toys, new toy retailers are emerging, and manufacturers are looking for new avenues of distribution. Another likely outcome is that toy manufacturers will become more creative and we’ll see more interesting and unique products coming down the pike.

If there is one thing I feel confident about, it’s that the toy industry will be anything but status quo in Q4.



Related Blog Posts


Crazy About Football: The League Triggers Sales of Cards in Spain
Crazy About Football: The League Triggers Sales of Cards in Spain

When Cristiano Ronaldo announced this summer that he was leaving Real Madrid, it’s safe to assume that more than one child thought of his next season's sticker album.

Global Toy Industry Opportunities Amid Toys“R”Us Closure
Global Toy Industry Opportunities Amid Toys“R”Us Closure

The global toy industry is bracing itself and trying to work out what this ‘reset’ will mean. Who will benefit from Toys “R”Us’ demise; and if it happens globally, which retailers will see this disruption as an opportunity, country by country?

What Toys‟R”Us Closing Means for the Toy Industry
What Toys‟R”Us Closing Means for the Toy Industry

Crunching the numbers, The NPD Group’s Juli Lennett sets the record straight on what will likely happen to the toy industry when Toys‟R”Us closes all its doors in the U.S.

Post-Toy Fair Blues
Post-Toy Fair Blues

Globally, fewer toys were sold during Holiday 2017 than 2016. Why? How can this be overturned? Frédérique Tutt explores how parents shopped, and what opportunities lie between the challenges facing the toy industry today.

npd.com | © 2018. The NPD Group, Inc.

Follow Us on