Toys “R” Us liquidation gives boost to toy sales
The toy industry is enjoying a growth spurt.
In the first 10 weeks of 2018, when the toy industry was in a “business as usual” state, U.S. dollar sales grew by 2% — on par with the results for the year-ago period, according to global information company The NPD Group. The proceeding four weeks brought two unique circumstances which converged to lift the industry: the beginning of the Toys “R” Us liquidation (March 15) and an early Easter (April 1).
In those weeks, from March 11 through April 7, toy sales grew by 36% over the same period in 2017 — driving year-to-date growth for the 14 weeks combined to 13%.
Regardless of when it falls on the calendar, Easter sales volume typically experiences a bump in the two weeks leading up to the holiday, providing an annual boost for the industry. Normalizing the year-to-date sales trend to split out Easter and decipher the impact of the Toys “R” Us announcement, results in around $180 million more being generated between March 11 and April 7, 2018. This represents additional toy industry sales that may be attributed to the Toys “R” Us liquidation.
“The Toys “R” Us bankruptcy has brought an incremental sales opportunity to the toy industry, and with at least a month to go until it wraps up, there is still more to come,” said Juli Lennett, senior VP and toys industry advisor, The NPD Group. “Shopping behavior since the announcement indicates that consumers are not pantry loading on Christmas gifts. I estimate that, of the 22% to give in October or later, about half of that is for birthdays or other occasions and the remaining for Christmas, resulting in a net impact on future Christmas sales of less than 1%. Looking ahead towards the holiday season, from what the data shows and what consumers are saying so far, fourth quarter sales should be only slightly impacted by the liquidation.”
In the first 10 weeks of 2018, when the toy industry was in a “business as usual” state, U.S. dollar sales grew by 2% — on par with the results for the year-ago period, according to global information company The NPD Group. The proceeding four weeks brought two unique circumstances which converged to lift the industry: the beginning of the Toys “R” Us liquidation (March 15) and an early Easter (April 1).
In those weeks, from March 11 through April 7, toy sales grew by 36% over the same period in 2017 — driving year-to-date growth for the 14 weeks combined to 13%.
Regardless of when it falls on the calendar, Easter sales volume typically experiences a bump in the two weeks leading up to the holiday, providing an annual boost for the industry. Normalizing the year-to-date sales trend to split out Easter and decipher the impact of the Toys “R” Us announcement, results in around $180 million more being generated between March 11 and April 7, 2018. This represents additional toy industry sales that may be attributed to the Toys “R” Us liquidation.
“The Toys “R” Us bankruptcy has brought an incremental sales opportunity to the toy industry, and with at least a month to go until it wraps up, there is still more to come,” said Juli Lennett, senior VP and toys industry advisor, The NPD Group. “Shopping behavior since the announcement indicates that consumers are not pantry loading on Christmas gifts. I estimate that, of the 22% to give in October or later, about half of that is for birthdays or other occasions and the remaining for Christmas, resulting in a net impact on future Christmas sales of less than 1%. Looking ahead towards the holiday season, from what the data shows and what consumers are saying so far, fourth quarter sales should be only slightly impacted by the liquidation.”