Decline in sales of pocket money toys hits total market, The NPD Group reports

A decline in sales of pocket money-priced toys has impacted the overall market, according to The NPD Group.

Reviewing the performance of the toy market to coincide with the opening of the Toy Fair event in London, The NPD Group found toys priced £5 and under fell by 12% in 2013, contributing to a 1% decline in the overall market to £2.9bn.

Although the price tag might be small, the UK market is reliant on impulse buys, said researchers. These pocket money toys represent almost 45% of all unit sales, so any decline has a significant impact.

Frédérique Tutt, global toy industry analyst, said: “In the UK we know that the impulse purchase of toys has been hit hard by the squeeze on consumer spending.

“In 2012 sales of ‘blind bag’ toys under £5, such as collectible Lego Mini Figures and Moshi Monsters, were a real driving force in the UK, much more so than in other European markets.

“Last year the industry was unable to keep the momentum and lost out on pocket money sales. So whilst higher value toys performed well, it wasn’t enough to compensate for the high volume/low value items.

“The good news is that as the economy improves, the UK toys market is well positioned for a rapid recovery. As it is less reliant on toy sales tied to special occasions, it reacts well when a new toy fad comes along – for instance, a strong movie license or collectibles. As people feel more confident about the economy, they’ll go back to adding these lower priced toys to their weekly supermarket shop, or they’ll pay more visits to their local toy specialist.”

According to The NPD Group, the number of units sold totalled 364m in 2013, a decline of 5%. Average prices, meanwhile, increased from £7.52 in 2012 to £7.92 in 2013.

The bright spots in 2013 were toys in the youth electronics and games & puzzles categories. Furby experienced a 66% increase in sales compared to 2012, and was the best-selling toy for the year. Other strong performers include Barbie, Lego Friends and Monster High for girls, adding £13m of sales versus their 2012 performance; Playmobil and Ninja Turtles for boys delivering a retail value growth of £20m; and Peppa Pig, Mickey & Friends, Little Tikes and new entry Doc McStuffins for pre-schoolers, generating in excess of £21m extra sales at retail.

Absence of a blockbuster movie hit licensing sales
Last year’s toy market performance also highlights its reliance on licenses as more than a quarter of the business is linked to a character from a TV series, movie or increasingly internet licenses such as Moshi Monsters or Angry Birds. In 2013, the absence of a strong blockbuster movie and the lack of leading new entertainment properties amounted to a loss of £44m in overall licensing revenue compared to 2012.

Natasha Crookes, director of the British Toy & Hobby Association, said: “The toy industry performance in 2013 was below analyst expectations despite a last minute surge in sales. Given the reasons for this slight decline, the trade remains confident the toy market has a good growth potential over the coming years and is really keen to start afresh in 2014. The toy sector is fast-moving and innovative, launching thousands of new products to market every year. The industry will be showcasing its large number of new and exciting concepts at Toy Fair which will help to drive growth in 2014.”

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