Video game sales and Toys R Us take a punch

December 13, 2009

Video game sales are continuing to slide off their huge year in 2008 and as a result retailers, and Toys R Us in particular, are feeling the effects. According to PC World, “November retail video game sales sank 7.6 percent under last year’s record revenues…Hardware sales were down 13 percent year-over-year, mostly due to the drop in Wii sales…”

That is the biggest reason for Toys R Us’ same store sales decline of 9.3%. According to Northjersey.com (yes, amazingly there is such a website) “The economy and consumer spending slump continues to be a challenge for the chain, as net sales declined to $2.7 billion, from $2.8 billion a year ago, and comparable store sales – sales at stores open at least a year – fell 9.3 percent.”

I wanted to know how traditional toy sales were affected so contacted one of my sources who tracks sales very closely. This person told me that video game sales represented half of the Toys R Us decline and the rest was due to baby furniture. How did traditional toys do, probably flat or slightly off.

Posted by Richard Gottlieb on December 13, 2009 | Comments (2)

December 20, 2009

In response to: Video game sales and Toys R Us take a punch
Joseph J Capriccioso commented:

When as a company you push the cheap bargain video game for 19.99 more than a 59.99 game,you kill your own business.As a company(toys r us) you have new releases which isn't really promoted and you make huge displays of the cheapest games and turn people away from your money makers.You can not alienate your audiance.Toys R Us is falling.I shop there and even the training isn't there.If The toy lines are huge why do the managers allow people to pay for toys in the r zone(video game area)The line grows crazy and people leave without buying anything.No common sense,no rules,no leadership.People just running a company with the intent to open and close.You need a heart and a drive as a store manager to do better each day than you ever have done before.You run it like a ship and to care about your crew.The drive to beat your numbers and destroy records so much it's embarassing.To be customer friendly and actually care about people and take the time to help them.Even when you get someone mean and nasty be nice and helpful.This is how i was a store manager and my stores were very successful.There were so many others with heart but corporations sticked their egos in the equation with a closed mind and eliminated alot of people with heart.What i saw in toys r us was chaos and no leadership and this will be the beginning of the end for toys r us trickling down store by store.Of course there are other factors involved that added to this will bring about the end of TRU.For one as i said before was recreating The failed KB Toys model and not the Prime KB Toys that was most successful.If corporations lose the ego and become open minded maybe they can treat their staff and stores better and united they can make their company the best it can be.I really don't believe this will be the case as i predict 2010 can be a disaster for Toys R Us.

December 13, 2009

In response to: Video game sales and Toys R Us take a punch
Billy commented:

Good to see Toys R Us doing poorly again. Hopefully people will not be suckered into buying their stock if they try to go public again and make the insiders rich before they dump the stock. And then bankrupt again. This story keeps repeating...