Wal-Mart stumbles: Could it be a slow death by toys?

February 21, 2010

I have written previously that I believe you can trace Sear’s decline to its decision in the early 1980’s to take out its toy departments. In doing so, it went from being a family destination to a place visited by blue collar men.

Similarly, I noted that you could see a similar decline in the fortunes of the department store industry. Once a primary destination for Christmas toy shopping, department stores turned their back on families a couple of decades ago and fittingly became a destination for more affluent women.

That was why I cautioned that Wal-Mart’s decision to cut back on toys would have a negative impact on its fortunes. It was for that reason that my eyes were caught by a CNN piece entitled "Wal-Mart suffers sales decline in key quarter." As the article put it: “Wal-Mart, the world’s largest retailer, said fourth-quarter sales at its stores open at least a year - a key gauge of retailers’ performance known as same-store sales - fell 1.6% compared to a 2.4% increase for the same period a year ago…Eduardo Castro-Wright, vice chairman of Wal-Mart, noted a slight drop in customer traffic during the 4^th quarter.

Did the article mention toys, of course not? Those who follow these trends typically fail to see the influence of toys on the overall market place. They look at macro concepts like the deflation of food stuffs. Could it be that families looking for a broad selection of toys decided to go elsewhere? What do you think?

Posted by Richard Gottlieb on February 21, 2010 | Comments (5)

September 9, 2011

In response to: Wal-Mart stumbles: Could it be a slow death by toys?
Kerriann commented:

If my problem was a Death Star, this article is a phtoon torpedo.

March 14, 2010

In response to: Wal-Mart stumbles: Could it be a slow death by toys?
Mary Couzin commented:

Recent interesting article showing expansion of specialty. Marbles: The Brain Store (they sell games, puzzles) are opening their 4th location in less than 2 years and plan on opening 6 more locations 2010. www.news.medill.northwestern.edu/chicago/news.aspx?id=161467

March 3, 2010

In response to: Wal-Mart stumbles: Could it be a slow death by toys?
Vicki Olson commented:

For those of us who own speciality toy stores, it is good news to hear when box stores like Walmart cut back on toys. I have lost too many lines to the box stores, yet many customers complain of cheap toys and poor selection there. I could use a boost in my business as could all the small retailers in my community. Walmart has hurt us all... yeah for a more discriminating consumer!

February 25, 2010

In response to: Wal-Mart stumbles: Could it be a slow death by toys?
Mary Couzin commented:

Many of those WalMart buyers went back to the specialty to buy toys and games it seems. Specialty traffic at NY Toy Fair in 2009 was down in attendance and outlook. This year at TF they were positive and writing orders. Bruce, I enjoyed reading your blogs on another aspect of this topic. (www.lundandcompany.com/bruce-blog.html)

February 24, 2010

In response to: Wal-Mart stumbles: Could it be a slow death by toys?
bruce lund commented:

I am with you 100% on this one, Richard. They will suffer as a shopping destination as a result of cutting back their toy department. It may make sense on paper, but it will not in the consumers mind. People love toys. They are fun, bright, colorful, hark back to memories of our own childhood and playthings. Toys are not a commodity and are a highlite of big box retailers. Like row upon retail row of rowdy, circus- like fun in boxes. Walmart is making a mistake.