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NPD Column Approaching year-end


NPD’s Rory Partis takes a look at the current performance of the UK toy market and puts forward some predictions for the end-of-year results.


A


s we go to print, the toy market stands at -1% year-to-date. But with October comes the business end of the year and will, in terms of the NPD data, pretty much dictate how the year will end up in


terms of growth or decline. A good Christmas in the toy industry generally means a good year, with around 25% of all toy sales coming in December and nearly half coming in the last three months of the year. I’m not sure there can be too many other industries that rely so heavily on one period of the year, for example sportswear and beauty products, also tracked by NPD, are spread more evenly across the months. So what can we expect from this time of the year in 2013? Let’s take a look at last year, and so far this year, to try and find out. There are obviously some categories that


have less of a reliance on peak season sales than others. Outdoor and Sports toys is certainly one, and Action Figures sales tend to be more dictated by big movie releases and TV series than other categories. The one category that currently stands out in terms of a heavy reliance on peak season sales is Games & Puzzles; nearly 40% of sales came in December for this category in 2012 and around two thirds were in the final quarter. In fact, Games & Puzzles is the second largest category in December with over £71m in value sales, it was only the fifth largest category for the whole year. So far in 2013, Games & Puzzles has been one of the top performing categories, showing +8% growth to YTD August. If the category was to show a similar performance in the crucial peak season this year as it did last year, then it could have a very impressive year in terms of value sales, the category grew +13% in December in 2012. Looking closer at the peak season we can see that trends do change over time, very often dependant on when the UK retailers decide to run promotions and how deal hungry the consumers are. In 2012 the evidence suggested that consumers left it late to do their Christmas shopping, with a bumper week 51 recorded in the NPD data. Week 51 alone was worth 6%


50 Toyworld


Monthly Traditional Toy Sales Value £m January 2011 to December 2012


540 2011 2012 386 363 560 229 92 91 105 100 128137 132125 147149 114117 183 174 128130 130134 212


Jan


% Ch (£) 2011%


-2


Feb -5


Mar 7


Apr -6


May 2


Jun 1


51% Source: NPD EPoS Retail Tracking The NPD Group, Inc. | Proprietary and Confidential


Jul 2


Aug 3


Sep -5


Oct -7


Nov -6


49%


“Even a small growth in the last couple of months could push the full year into a positive trend.”


of the entire year in toys and was up 4% from the same week in 2011. This could be in part due to the day that Christmas fell; being on a Tuesday most shoppers had the weekend plus the Monday to do their shopping. This year Christmas is on a Wednesday so most will be back to work for a couple of days before Christmas, this means we might see a better performance in week 49 or 50 as consumers decide that it’s better to be prepared. December added over £20m to the total industry in 2012 and it might be hard to replicate that in 2013. So what do we see for peak season in 2013? There are some interesting items out there


that could do very well this year, especially the Robotic Pets area is looking strong with Furby Boom and the Teksta Puppy already being mentioned in the top toys lists, and tablets also. Will games have as strong a December as previously, given the sale growth we have seen to date? At the moment the total toy market is sitting at -1% in value vs 2012, but with consumer confidence improving in recent months, a plethora of new products hitting the market in recent weeks, and with 34% of all toys being purchased for Christmas, even a small growth in the last couple of months could push the full year into a positive trend.


Dec 4


4% 4% 6% 5% 5% 7% 6% 6% 8% 9% 16% 24%


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