Industry Sales See Minimal Declines for the Year Despite Slowing Sales Due to Difficult Economic Conditions

PORT WASHINGTON, NY, February 12, 2009 – According to leading market research company, The NPD Group, U.S. retail sales of toys generated $21.64 billion in 2008 compared to $22.32 billion in 2007*, a decline of 3 percent.  With a loss of 5 percent, the fourth quarter of 2008 (Oct. - Dec.) showed the most significant decline in sales for the year.

Despite slowing sales, particularly during the turbulent economy that plagued the fourth quarter of 2008, recent research from NPD** shows spending on toys captured the largest share of total expenditures on kids ages 0-14 during the five weeks leading up to Christmas.  Apparel & accessories, video game hardware, and video/PC game software followed toys in terms of dollar sales ranking.

"While many industries are feeling the effects of the economy, this shows that toys remain a vital part of total spending on kids," said Anita Frazier, industry analyst, The NPD Group.

Several key super-categories experienced significant swings in sales on both the positive and negative sides of the spectrum, with Building Sets and Plush showing growth of 26 percent, and 22 percent, respectively.  On the downside, Vehicles, Youth Electronics, and Dolls saw the largest declines in 2008, with respective losses of 16 percent, 14 percent, and 10 percent over 2007.

All channels experienced declines in 2008 except for Food/Drug stores, which experienced a slight gain of 1 percent.  Mass Merchant/Discount, and Online/Internet channels saw the most modest declines, with losses of 2 percent and 4 percent, respectively.

Top properties for the year (based on total dollar sales) included Barbie, Crayola, Star Wars, Transformers, and Webkinz.  Licensed toys represented 27 percent of total industry sales in 2008, mirroring 2007's 27 percent.  Star Wars and Disney Princess topped the list of 2008's best-selling licensed properties.

*NPD is following the National Retail Federation’s (NRF) recommendation of adding a 53rd week to the 2006 retail calendar year (February 2006 – January 2007).  Due to the extra week in calendar year 2007, which falls in Jan’07 and represents approximately 2 percent of annual dollar sales, care should be taken when comparing any 2007 data to other years.

**Spotlight on Kids: Understanding Cross-Category Purchasing

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