With Toys R Us Gone, Where’s The Toy Market Share?

It was particularly painful for those of us who grew up as “Toys R Us kids” to watch the now-closed big box toy store liquidate all of its assets over the course of several months last winter and spring. Toys R Us finally closed its U.S. locations for good on June 29, and it marked the end of an era for the long-running toy store and perhaps for big box toys stores in general.

But when Toys R Us went under, nostalgia took over. As it typically does, as one entity died, it gave way to a resurgence in toy shopping – at least for a short period of time. In fact, toy sales jumped about 7 percent from January to June of 2018, an encouraging sign that perhaps there was life beyond the brick-and-mortar store for Toys R Us. However, this optimism quickly came to an end when sales again slumped in July and August.

Though there are a few days left in September at the time of this writing, the forecast for the month seems to continue the downward sales trend – and that’s particularly concerning for toy brands. Why? Because it’s these back-to-school months where parents tend to begin holiday shopping, especially when it comes to toys. If that’s not happening, then the outlook for the toy industry overall could be grim.

Slumping Sales Mean Slumping Brands
With Toys R Us’ closure, the major toy brands have been pleading with the other big box retail stores to expand shelf space for toy merchandise. But that still hasn’t been able to sustain the toy industry.

Take Hasbro, for instance, one of the most well-known toy brands out there today. Its popular Nerf division has seen a sales dip of about 30 percent over the past year. Not surprisingly, about one-fifth of all Nerf toys lined the shelves at Toys R Us. Mattel is another slumping brand, and with other retailers hesitant to expand their in-store toy sections, toy brands are going to have to fight harder to stay solvent. Even Amazon isn’t scooping up as much of the toy market as they thought, as consumers view the e-Commerce giant as more of a place where you purchase specific items rather than browse.

Where Can You Shop for Toys?
With Toys R Us officially out of business and the toy market as it is dwindling, it begs the question: Just where can you go to shop for toys? The good news is that you have options. Here’s a look at where you can do your holiday toy shopping this year:

Walmart: Though Walmart hasn’t committed to extended shelf space for toys year-round, it has said that it will enhance it for the holiday season. In fact, the retailer expects to increase its toy offerings by up to 30 percent at all of its brick-and-mortar locations this year, making it an ideal option to browse and shop for the children in your family.

Your local toy shops: If there’s a local, independently-owned toy shop in your neck of the woods, make sure you support it. Though many of these small toy shops were put out of business when Toys R Us was booming, now is as good of a time as ever to support the one in your area.

Target: Like Walmart, Target is another big box store that is planning to increase its inventory of toys this holiday season, likely placing the additional offerings in the aisles dedicated to seasonal products.

Party City: This one is just a rumor for now, but there are some reports out there that Party City and its seasonal sub-brand, Halloween City, will transform seasonal locations into “Toy City” this holiday shopping season. If true, the company will essentially offer a temporary big box toy store that can serve as an ideal venue to get all of your toy shopping completed in.

Though Toys R Us may be a store no more, it doesn’t necessarily mean there won’t be other places to purchase toys. And while the toy market overall is struggling, a good holiday selling season can perhaps breathe some life back into this crucial product segment.

Regards,

Ethan Warrick
Editor
Wealth Authority


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