Toy Business Ends 2012 with Big Sales

Playthings Staff -- Gifts and Dec, 1/17/2013 9:40:20 AM

PORT WASHINGTON, NY - The toy business left off on a good note in 2012. The NPD Group reported that sales were up throughout the U.S. retail toy industry ending with a strong December finish.

Sales were up 18 percent and unit sales were up 10 percent when compared to the same time period in 2011, according to the NPD Group's Retail Tracking Service. Overall, dollar sales for December topped $5 billion* for the first time in three years, and were up 1.3 percent versus year-ago. This was the second consecutive December with revenue growth for the category, as 2011 dollar sales were up 1.5 percent compared with 2010. The study also found that shoppers waited until the last two weeks of December to do their holiday toy shopping.

For the year overall, U.S. retail Toy sales totaled $16.5 billion, a slight decline from the $16.6 billion recorded in 2011, according to the NPD. The Toy industry categories in the U.S. with the largest revenue gains in 2012 were Building Sets, Arts & Crafts, Dolls and Infant/Preschool, with respective increases of 19.7 percent, 6.9 percent, 5.8 percent and 2.5 percent. Plush, Outdoor & Sports Toys, Vehicles and Games/Puzzles experienced the most significant declines when compared to 2011, at 12.6 percent, 8 percent, 6.2 percent and 5.8 percent, respectively. The remaining categories: Action Figures/Accessories & Role Play, Youth Electronics and All Other Toys were flat.

"Like other categories, Toys took a hit in November, caused by waning consumer confidence, concern about fiscal policy and Superstorm Sandy," said Russ Crupnick, senior vice president, industry analysis, The NPD Group. "Events like these prevented Toys from experiencing a better year. The good news is when consumers did break out of their cocoon in late December they flocked to the toys section at their favorite retailers."

Crupnick added that more consumers were willing to purchase more expensive toys in most of these categories."For example, the average price paid for a Building Set rose 12 percent in 2012, and consumers paid 14 percent more for Arts & Crafts. This suggests that consumers are willing to pay more for toys that they perceive as being beneficial to children's play or learning experience, or as providing value as a gift," she said.

Top properties for the year, based on total dollar sales, included Barbie, Disney Princess, Hot Wheels, Monster High and Star Wars. The NPD Group also noted that several of the top properties were based on licenses. Overall, the licensed toy category grew only one percent in 2012. Licenses are typically a key driver of the toy category. Though they account for 30 percent of total industry sales (2012) they typically command higher average retail prices.

"The 'toy story' for 2012 was filled with concern about declining birthrates, economic uncertainty and competition from consumer electronics, and those are all real issues for the Toy industry," said Crupnick. "But, in the end, consumers proved that toys are still important and relevant as play options, and that they are willing to pay extra for products that deliver on play value."