It feels strange not writing this Blog from Hong Kong. Even though this is the third year in a row that I’ve not travelled there in January, a part of me still thinks that’s where I should be at this time of year. The FOMO is not as acute as it might have been, given how few of my UK customers are there this year, although I have read a posts from a few people who did make the trip.
Based on what they’ve said, it is – as you would expect – quieter than usual. A company with a showroom at the Grand Stamford sent me a picture of the digital screen detailing who is showing there – with just their name on it. A blog written by Basic Fun’s Jay Foreman admitted that he had only a handful of appointments, compared to the hundreds he used to have. That said, some people have had a different experience: Dragon-i Toys’ Dave Cave ended up with over 40 appointments, having initially expected around half that number, while others pointed to a respectable turn-out by customers from Asia and the Middle East.
Based on the pictures I saw, the visitor profile of the Toys & Games Fair itself seemed more local than international, and quieter than usual; but nevertheless, the show went ahead and some exhibitors – such as MSZ Diecast’s Sam Chung – spoke of being pleasantly surprised at how busy they were. Credit to the HKTDC for getting an event off the ground on under challenging circumstances – I am sure that January 2024 will be a very different story.
Meanwhile, back in the UK, retailers have been unveiling their festive sales performances, which – in the main – seem encouraging. Both Tesco and Sainsbury’s reported solid increases, although the numbers mostly focused on food sales: Sainsbury’s did confirm that Argos sales jumped by 7%, but there was no indication of how toys fared within the overall mix. However, both grocers admitted that online food sales fell, as consumers returned to store, presumably looking to ensure they were getting the best bang for their buck. In turn, I suspect that might have helped sales of toys, which are far more likely to occur in-store rather than online.
Mark Kingston and I had an interesting email exchange before Christmas, discussing his assertion that UK grocers have yet to crack the conundrum of delivering food and non-food baskets online in a single transaction (unlike several of their European counterparts). In Mark’s words, “a seamless food and non-food online experience would be a game changer.” In the absence of UK grocers’ ability to do that, encouraging customers to visit stores rather than ordering online seems the best way for them to grow toy sales in the foreseeable future.
One retailer which did single out toys in its results report was Very, citing a 17.7% year on year increase for its toys, gifts & beauty category, and a 26% year on year increase for toys alone. Considering overall sales grew by only 2.2%, toys was clearly one of the key drivers in Very’s Q4 success. Elsewhere, anecdotally, I heard good things about Smyths (repeating orders multiple times since 23rd December), Aldi (selling out lines halfway through the promotional period) and The Entertainer (a big jump in the week before Christmas compared to last year). All in all, I think we can say that after a worryingly slow start, Christmas came good for many right at the death.
No definitive word yet on the stock situation in the UK toy market, but Tesco found a novel way of dealing with its food overstocks, deciding to give each employee a box of Quality Street as a bonus, rather than cash. Given the same boxes were being cleared out at £3 in my local Tesco last weekend, I bet that made the staff feel really special and valued.
As well as retail results, there have been several other key news stories this week: Spin Master was the first major toy company to announce an acquisition in 2023, that of robotics company Hexbug. The deal had been rumoured since the range was spotted in the Spin Master showroom during LA week in September. My suspicion is that there are plenty of other mergers and acquisitions to come this year– conditions just feel right for M&A activity to flourish.
I’d also like to congratulate Guy Rooney on being appointed commercial director at Pat Avenue, where he will join up with former colleagues Terry Crew, Sharon Gaskin and Gary Cockerell – they obviously decided to put the band back together (if they’re wearing pork pie hats and shades at Toy Fair, you’ll know they got that reference). Also, congratulations to DKB Toys on being appointed to handle distribution of key Creative Kids lines to the specialist retail channel in the UK & Ireland – a good move for both parties – and to our sales director Mark Austin and his partner Chloe on the birth of their daughter Elliana this week. With Anita and I due to become grandparents in April, the Toy World team will definitely have a whole new perspective on what we see at Toy Fair this year.
Speaking of Toy Fair, my annual reminder that I hope buyers will focus their meetings on full paid-up exhibitors, rather than the various non-exhibitors who prowl the aisles in the hope of snaring a buyer or two. It’s quite simple: the exhibitors are the ones who are funding the event. Without them, none of us would be going to Olympia in two weeks’ time. Of course, there is no law against non-exhibitors attending the show, but while some companies are suitably discreet and respectful, others are perhaps less so – one company appeared to send its entire UK / EMEA team to the event last year, where they were roaming the aisles en masse (albeit they had the self-awareness to look a bit furtive when I caught their eye). If I am being honest, that approach just feels a bit cheeky to me. If you want to speak to buyers at the show, take a stand. If not, that’s absolutely fine – maybe make an appointment for Nuremberg or your showroom instead? Just a thought…