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Growth Prospects

Playthings' exclusive regional sales forecast spotlights US growth markets through 2013.

By Kay Anderson -- Gifts and Dec, 3/1/2009 12:00:00 AM

From 2008 to 2013, consumer spending for toys, dolls and games in the U.S. is expected to increase by 12.8 percent, according to projections by New York-based research firm Easy Analytic Software Inc. (EASI). In 2008's tough economic climate, estimated sales for the category—which includes video games as well as traditional toys—grew by 3.5 percent to $55.1 billion on the strength of surging video game sales. By 2013, retail sales will ring in at $62.2 if projections hold.

Regional growth prospects

Both the West and the South are expected to snare the lion's share of the sales growth—15 percent each, not too surprising since both are continuing to see their populations grow at a fast clip.

Nevada and Arizona will set a blistering growth pace in the West, according to the EASI statisticians; both states are expected to exceed 20 percent in sales growth. Nevada's sales will grow from $480.8 million to $598.4 million in the five-year period; Arizona's from $1.19 billion to $1.47 billion.

Idaho is expected to hit a 20 percent increase, from $277.6 million in 2008 to $333.2 million in 2013.

Colorado is expected to join the million-dollar club in total toy sales over the next five years, with a projected 16.5 percent increase, from $989.4 million in 2008 to $1.15 billion in 2013.

The only state in the West not expected to exceed the national average in sales growth is California. EASI projects toy sales in California to go from 2008's $6.1 billion to $6.9 billion in 2013, a 12.2 percent rise.

One-half of the South's 17 states are expected to exceed the nation's growth rate of 12.8 percent. Texas will lead the way, growing 18 percent from $4.15 billion in 2008 to $4.90 billion in 2013. Georgia is projected to have a 17.7 percent increase, from $1.64 billion to $1.93 billion. Florida's growth rate of 17.4 percent is projected to be only slightly slower than Georgia's, with sales of $4.0 billion, up from $3.42 billion.

The South is also projected to have a newcomer to the billion-dollar club over the next five years. Maryland's toy sales are expected to hit $1.09 billion in 2013, but with a growth rate, 9.9 percent, below the national average for the period.

The District of Columbia, also in the South, is expected to be under the national average, with a growth rate of 7.3 percent. Toy sales will rise from 2008's estimated $102.4 million to $109.9 million in 2013.

In the Midwest, only South Dakota will exceed the national growth rate, with a 13.1 percent increase in sales, from an estimated $153.0 million in 2008 to $173.0 million in 2013.

The region's three largest states in terms of sales are projected to have toy sales growth below the national average. Illinois' sales are projected to increase by 10.3 percent, from $2.35 billion to $2.59 billion; Ohio's by 8.5 percent, from $2.19 billion to $2.38 billion; and Michigan's by 8.4 percent, from $1.89 billion to 2.05 billion.

None of the states in the Northeast are expected to have sales growth exceeding the national average; only two, New Hampshire and Maine are expected to even top 10 percent in sales growth for the period.

Metro growth

While none of the states in the Northeast are expected to exceed the national average in sales growth, there are metropolitan areas that will—most of them in Pennsylvania. While the state as a whole is expected to grow toy sales by 9.6 percent, from $2.4 billion to $2.6 billion, four of its smaller metros (with core populations of less than 50,000) are expected to increase toy sales by more than 15 percent. Combined sales from East Stroudsburg, Chambersburg, Lewisburg and Gettysburg will top $1 million in 2013.

Among the state's larger metro areas (with core populations greater than 50,000) six are expected to have growth rates in toy sales exceeding the national average: York-Hanover, Allentown-Bethlehem-Easton (whose metro tentacles reach into New Jersey), Reading, Lebanon and State College.

The nation's largest toy market—New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.—is growing toy sales more slowly than the national average, according to EASI's projections. At the projected 7.3-percent growth rate, toy sales in the area will hit $3.46 billion, up from 2008's estimated $3.23 billion.

The Northeast's other billion-dollar market—Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.—will also be growing more slowly than the national average, according to the forecast. With estimated 2008 toy sales of $1.07 billion, EASI projects a 9.4 percent rate of growth to $1.17 billion in 2013.

In the fast-growing Western states, 101 (or 59 percent) of the region's 171 metros are projected to outpace the nation's toy sales growth rate. Seven major metro areas are expected to increase toy sales by more than 25 percent between 2008 and 2013, with one, Phoenix-Mesa-Scottsdale, joining the billion-dollar club, if just barely. Other large metros expected to grow toy sales by more than 25 percent are St. George, Utah; Bend, Ore.; Greeley, Colo.; Prescott, Ariz.; Las Vegas-Paradise, Nev., and Boise City-Nampa, Idaho.

The West's largest metro toy market, Los Angeles-Long Beach-Santa Ana, with 2008 estimated sales of $2.01 billion, is expected to grow toy sales at substantially less than the national average, at a rate of 8.8 percent to $2.19 billion in 2013. But it will remain the nation's second largest toy market, behind metro New York.

In the South, 158 (or 40 percent) of the region's 394 metro areas are expected to exceed the national average in toy sales growth. Among the large Southern metros, eight are projected to grow faster by more than 25 percent. Of these, four are in Florida (Palm Coast, Cape Coral-Fort Myers, Ocala, Port St. Lucie), two in the Carolinas (Myrtle Beach-Conway-North Myrtle Beach, S.C and Raleigh-Cary, N.C), one in Texas (Austin-Round Rock) and one in Georgia (Gainesville). Together, their sales are forecasted to top $1.1 billion in 2013.

Already home to one billion-dollar-metro—Dallas-Fort Worth-Arlington, Texas, which had estimated toy sales of $1.13 billion in 2008, projected to grow to $1.36 billion in 2013—the South is projected to welcome two more into the club by 2013. Toy sales in the Atlanta-Sandy Springs-Marietta, Ga., metro are expected to reach $1.14 billion in 2013, up from $940.3 million last year. In the Houston-Sugar Land-Baytown, Texas metro toy sales are expected to grow from an estimated $954.4 million in 2008 to $1.14 billion in 2013.

In the Midwest, only one of the large metros, Sioux Falls, S.D., is expected to grow sales faster than 20 percent, reaching $56.8 million in 2013. None of the small metro areas are projected to grow toy sales faster than 20 percent. Of the region's 280 metros, 51 (or 18 percent) are expected to exceed the national average in sales growth, however. The region's largest metro, Chicago-Naperville-Joliet, Ill.-Ind.-Wis., is expected to increase toy sales by 10.8 percent over the next five years, going from $1.69 billion in 2008 to $1.87 billion in 2013. With that sales growth, greater Chicagoland will remain the nation's no. 3 largest retail toy market.

The metro giants

The dozen largest markets in the U.S. are very slowly losing market share. In 2007, together they accounted for 29 percent of total U.S. toy sales; last year their share was down to 28.1 percent; by 2013 their share is expected to be 27.9 percent. The fastest-growing of the largest metros are in the West and South, led by greater Phoenix, followed by Atlanta-Sandy Springs-Marietta, Dallas-Fort Worth-Arlington and Houston-Sugar Land-Baytown.

Of the twelve metros, only one—Dallas-Fort Worth-Arlington—is expected to increase its market share between 2007 and 2013. Three others, Boston-Cambridge-Quincy, Mass.-N.H., Atlanta-Sandy Springs-Marietta, Ga. and Houston-Sugar Land-Baytown, Texas are expected to hold on to the market share they had in 2007.

San Francisco-Oakland-Fremont, Calif., No. 12 on the 2007 list of biggest markets, slipped out of the top dozen in 2008, to be replaced by fast-growing Phoenix-Mesa-Scottsdale.

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  Impressive data but given the huge numbers being rung up in the video game industry, it would have been interesting to see what the projections would be for traditional toys and games without video games being factored into the equation.

  
  

  
  

  Paul Albhouse - 2009-03-16 14:42:00 EDT
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