by Naomi Sleeper, VP of Continuous Improvement and Strategic Initiatives, Imperial Distributors
As we head into the fourth quarter of the calendar year, attention is turning toward toys. Last year’s liquidation of 800 Toys R Us stores have led to declines in the U.S. toy industry year-to-date compared to last year, according to market research company The NPD Group. However, compounded annual growth rate is up between 2016 and 2019, showing a favorable overall trend in category sales. The NPD Group expects sales to increase during the second half of this year with Toys R Us closure out of the data comparison.
“A strong slate of license-friendly movies” in this coming quarter also are expected to help boost toy sales for the upcoming holiday season, reports NPD. This past summer, Toys R Us announced that it is reopening a handful of stores with a new shopper experience-driven mode, highlighting further optimism for retail sales in the category.
The positive outlook on the overall U.S. toy industry adds to other favorable factors for the toy category in supermarkets. It was predicted by some industry experts last year that Toys R Us closures would mean increased toy sales opportunities for supermarkets (Washington Post, 2018). For many supermarkets, this hope was realized. Some of the largest supermarket retailers saw the benefit of adding space for the category after the Toys R Us liquidation. Despite year-over-year decline in U.S. toy sales for the first half of 2019, Imperial’s sales show a positive trend in the category in supermarkets, including a 25-plus percent increase in puzzles and Lego sub-categories. We expect continued sales growth in toys throughout the fourth quarter.
To make the most of toy sales in supermarkets this season, consider these key selling tips:
- Multi-brand in-and-out drop-in solutions: Merchandising top-selling boxed toy assortments (like Legos and puzzles) off-self toward the front of the store make toy merchandising easy for store teams and toy purchases convenient for shoppers.
- Licensed product: As the NPD Group suggests, licensed product that inspired by popular movies coming out this season (“Joker,” “The Addams Family,” “Frozen 2”) are expected to be top sellers in the toy category. The films provide relevant tie-ins for October (Halloween) through December (Christmas).
- Food-related toys and games: With Millennial parents’ focus on their children’s’ healthy eating, food-related food and games have become increasingly popular, according to Forbes (2019). These products help to teach kids about healthy food choices and include them in food preparation. What better place to sell these new toy products than in the grocery stores that sell these healthy food options!
- Retro games: Throwback games continue to appeal to shoppers’ nostalgia and make great impulse gifts for kids and adults alike, making them ideal for supermarkets to merchandise in stores. (My personal testimonial for this one: A couple years ago, I bought an Atari from a supermarket as a holiday gift for my brother—it was a huge hit [for both of us!]).
- Play stations: If Toys R Us’ new experiential toy store concept is successful, it will reinforce the trend in consumers’ prioritization of the enhanced shopping experience. To take a page from this playbook, supermarkets can designate a small area of their store for kids to play with sample toys before parents make their purchase.
Toy sales are looking bright for quarter four. Taking advantage of this opportunity for incremental sales in your stores this season will add a smile to your shoppers’ face…and yours as well!