Countdown to London Toy Fair … it’s the Friday Blog!

The week before Toy Fair is always a slightly strange one. There are inevitably last-minute things that need sorting out and preparation to pull together ahead of scheduled meetings. Yet you still spend most of the week thinking “I just wish we were there now.” Thankfully, there’s not long to wait now…

We’ve already seen an increase in the number of press releases we’ve been receiving – and the deluge will turn into a flood any day now. The stage is set, exhibitors are getting excited, and hopefully retailers will be turning out in force. No snow is forecast, and there aren’t any train strikes planned, so that’s two big potential pitfalls avoided.

New products are the lifeblood of the toy market, they drive sales and generate excitement for consumers. We’ve already seen several early year launches getting off to a flying start (both Bandai’s Littlest Pet Shop and Flair’s Godzilla x Kong range have been cited by indies as selling well in the last few weeks), and with the next mainstream UK toy event – the Toymaster show – not taking place until the latter stages of May, the first half of the year will surely be far more successful if retailers can unearth a few gems at Olympia next week. That alone, in my humble opinion, makes a trip to the show absolutely essential for retailers large and small.

There have been a few significant changes on the buying side in recent weeks: it’s been common knowledge for some time that Charlie McNally will be leaving his role at Argos to take over toy buying for Europe at Aldi, based out in Dusseldorf, while Sarah Harding has left her role at Toys R Us UK to join The Entertainer. And what a time to be making that move…

No prizes for guessing the liveliest topic of debate in the toy community so far this year – The Entertainer taking over the running of Tesco’s toy department has unsurprisingly led to some interesting conversations. I caught up briefly with Geoff Sheffield in Hong Kong last week, as well as the Addo Play team, and it’s abundantly clear just how excited everyone within The Entertainer family is about this development.

Without giving away any major commercially sensitive information, I can certainly answer a few of the questions that have been raised most frequently by suppliers: for starters, anyone expecting The Entertainer to change its position on margin, now that it is controlling the Tesco toy aisles, is going to be disappointed. I am afraid suppliers are going to have to forget whatever trading terms they used to get from Tesco: that ship has sailed, and it won’t be coming back any time soon. The Entertainer secured the deal on the back of a successful trial – so it is not going to change what worked last year. And in any case, significant investment will be required to maximize the new partnership (store fittings, logistics capabilities, staffing etc), while Tesco will obviously be taking some form of ‘cut’…all the more reason for The Entertainer to maintain its traditional margins to cover these costs.

I can also confirm that if The Entertainer hasn’t been stocking a particular product range in its stores (i.e. Halloween, Harry Potter etc), that won’t change. Sure, those ranges may be found elsewhere in Tesco stores, but they won’t find their way into the toy aisles. And Sunday working for The Entertainer staff will remain off the table: schedules will be drawn up to allow the Tesco shelves to be restocked and merchandised late on Saturday evening and first thing on Monday, and there will be no staff from The Entertainer team on hand on the Sunday. All of this seems entirely logical and consistent, and to be fair, I didn’t expect anything else – anyone who knows Gary is aware that The Entertainer’s core values will never be compromised, whatever the circumstances.

Any influence from the existing Tesco toy buying team is already on the wane: appointments for Toy Fair have been cancelled (the day after they were made in some cases) and autumn winter orders that had been sent out were subsequently rescinded. The message is clear: as of now, toy suppliers are essentially dealing with The Entertainer for all Tesco toy-related conversations.

Not all suppliers are thrilled about that. The disparity between The Entertainer’s margin requirements and those of Tesco means that some lines that were big sellers in Tesco may no longer work under the new conditions, and even if certain lines stay in, the profitability will be significantly impacted. Without doubt, some suppliers are having to come to terms with that and evaluate how best to manage the situation. Other suppliers are seeing the upside: one pointed out that “the Tesco consumer will finally have a product range curated by people who are passionate about the product,” while others who struggled to establish a partnership (or even a conversation) with the Tesco toy buying team have nothing to lose and everything to gain.

Meanwhile, other retailers will be watching closely too: not just grocers, but major and independent specialists will be keeping a close eye on proceedings in case new opportunities present themselves as a result of The Entertainer / Tesco situation. Basically, there will be winners and losers – and everything is up for grabs.

The UK toy market may have been down last year according to Circana numbers (and don’t forget, that’s without factoring inflation in….), but we are starting all over again from scratch. New year, new challenges, new opportunities. It’s an election year, with an incumbent government a long way behind in the polls: expect tax giveaways out of sheer desperation if nothing else. Inflation is slowing (no, we aren’t paying less for anything …prices are just not rising quite as fast as they were – big difference) and maybe we won’t have a rain-soaked summer like last year.

Whatever happens, it all starts next week at Olympia. As Keith Elmer always used to say: “How can you be serious about toys and not be there?” That sentiment is as true as it ever was, and with the Toy Fair celebrating its 70th anniversary, we should all raise a glass or two next week to its continuing success.

Personally, I will be attending my 43rd Toy Fair, and I am still as excited about the show as I have ever been. It may have changed over the years, but it is still the one event which brings pretty much the entire UK toy community together in one place, and we should cherish that.

See you at Olympia. Toy World can be found on Stand B23, at the heart of the show.

Hong Kong takeaway… it’s the Friday (Hong Kong) Blog!

I have spent this week in Hong Kong, although I will be back in the UK by the time you read this Blog. I may or may not actually be awake (a week of atrocious sleep caused by jetlag takes its toll), but I will at least be on home soil.

When I flew out last Friday evening, I posted on LinkedIn that I would be heading here for the first time in four years, and I had numerous comments asking me to “tell it how it is,” which I intend to do. I got the distinct impression from some of the comments that US-based companies were rather hoping I would reinforce their perception that the trip is now surplus to requirement, while perhaps some people in the UK & Europe were hoping I could offer a more optimistic take.

I came with no pre-conceptions – all I can do is to reflect on what I have seen and heard over the past week, and then you can take from that whatever you choose to, and specifically what is relevant for your business. Of course, people who made the trip are maybe more likely to adopt more of a ‘glass half full’ perspective, while those who didn’t perhaps want to hear that they were right not to come. I will say that Hong Kong in January isn’t for everyone – maybe it never should have been.

That said, the majority I have spoken to this week seem perfectly happy that they came. Unsurprisingly, it is markedly different to pre-pandemic days – there are far fewer western faces around, both in TST and at the Hong Kong Toys & Games Fair. US visitors in particular have been thin on the ground (although interestingly, the ones that did come have been some of the most enthusiastic about their experience). There were far fewer showrooms open in TST, with many companies saying that although they doubled the number of appointments compared to last year, they would need to double again to get even close to 2019 levels.

But, interestingly, there are some positive interpretations of the footfall situation: many told me that meetings were easier to secure due to less competition, went on for longer (very few people rushed round showrooms in 10 minutes because they were running late for their next meeting) and the people who were here were serious, not just browsing. As a result, the quality of meetings has generally been felt to have been meaningful – if retailers or distributors committed to making the trip, they did so for the right reasons.

It could also be said that before Covid, certain retailers and toy companies came here largely out of FOMO, or – let’s not beat about the bush – to have a good time with their customers (and not to let their competitors have their customers all to themselves). Visitors sometimes included companies whose FOB range consisted of a dozen SKUs which were all also available domestically (or in some cases who didn’t even have any FOB offering at all). I’ll not go so far as to use the word ‘jolly’, but you get my drift. That doesn’t tend to happen anymore, taking the January Hong Kong trip back to its original roots as principally an FOB buying destination. To illustrate my point, Smyths had a team of 19 people here, but were apparently not making appointments with UK / European domestic suppliers – just Far Eastern vendors and factories.

Also here from UK retail were The Entertainer (now with added Tesco aisles to fill of course), Toytown, Home Bargains, Ken Black, The Works, TK Maxx, play-room and Menkind. Further afield, there were strong contingents from Australia, South America, Middle East, Europe (Greece, The Nordics, Germany, Turkey, Hungary, Netherlands were all mentioned) – and naturally, it’s an essential destination for the wider Asian market. If you want to see retailers or distributors from Asia, this is still the optimal place and time to do it.

So, who wasn’t here? US retailers and suppliers were conspicuous by their absence – and I don’t see that changing dramatically – LA is their new spiritual home. That said, I did find it both interesting and faintly amusing to hear that neither Walmart nor Target have confirmed autumn winter selections yet. But…but…people said they wouldn’t ever come here again or visit any other Q1 show because everything would have been finalized in November….and remember, this is after both LA and New York took place in September last year. Perhaps it just goes to show that selection timing is not cast in stone in perpetuity and can flex according to market conditions.

Apart from the US contingent, when you also factor in fewer clearance people, a miniscule licensing / media presence, no domestic suppliers just here because everyone else was and the absence of a large percentage of the international distributor crowd who have also become devout LA disciples, the trip has been stripped back to its core essence… and some have said they believe this has made it a more focused, better event for them than it even was pre-pandemic. And what’s more, no-one needs to get here on 1st January or stay for two weeks anymore – a briefer trip works perfectly well, is kinder on the budget and helps make January marginally less hectic.

I know this may not be what some of you wanted to hear (and if you all pile back, it will make it less focused again), but from what I have been told this week, I genuinely believe the trip still has its place in the grand scheme of things. It’s not for everyone, and neither should it be. Supplier or retailer, all I would say is if it works for your business model, don’t be put off by voices on social media writing it off because it isn’t necessary for them. My gut feel says it will never get back to the level it was pre-pandemic, but I wouldn’t mind betting that there will be a few more people here next year.

I’ll finish off with a few quick non-Hong Kong nuggets. Talking point of the week remains The Entertainer / Tesco situation – as I suspect it will for quite a while. More on some of the issues being raised in next week’s Blog. I know I haven’t said much about Christmas trading, but I am still waiting for greater clarification – although anecdotally, I have heard both directly and indirectly that a couple of the key players are admitting that the final week bounce didn’t materialize – indeed, I gather trading was actually down. If so, I can’t say as I am surprised – the fact stores had an extra trading day is, frankly, irrelevant. If a family had £100 to spend on presents, they didn’t have £120 because there was an extra day’s trading – that isn’t how it works when money is tight I’m afraid.

Finally, thanks for all your lovely comments about our January issue – if you missed it when we first shared it on Monday, the main issue and Nuremberg supplement will make wonderful weekend reading, especially if you want to stay in the warm. With the London Toy Fair celebrating its 70th anniversary, we really wanted to capture the sense of affection the UK toy community has for the event and the important role it plays in bringing everyone together. I hope the issue gets you in the mood for the show, as it won’t be long before we all convene at Olympia – I look forward to seeing you all there.

That’s Entertainer-ment … it’s the Friday Blog!

Happy New Year! I hope you all had a wonderful festive season, that your batteries are fully recharged and you’re ready and raring to go for Toy Fair Season. 2024 is the Chinese Year of the Dragon – apparently, one of the most powerful and luckiest animals in the Chinese Zodiac – so let’s hope some of that power and luck rubs off on the toy community.

2024 has certainly started with a bang, following the news that Tesco’s trial partnership with The Entertainer to run its toy departments will now be made permanent and extended to Tesco’s entire UK retail estate & key stores in the ROI. That’s a major coup for The Entertainer team, who will no doubt be fired up for the next stage of the partnership. And it’s massive news for the UK toy community as a whole…

Barely a week went by last year without someone asking me whether I had heard how the Entertainer / Tesco trial was going. Indeed, whenever I have spoken to Gary Grant over the past year, I have raised the question as to whether it was likely to be extended, only to be repeatedly told that he didn’t really know.

With the festive season behind us, I wondered if I would get a call from Gary with an update… which finally came yesterday lunchtime. And the news was exactly what Gary and his team had been hoping for all along: the Entertainer’s relationship with Tesco is to be expanded to its entire 759 store estate in the UK and key stores in the Republic of Ireland, while it will also be supplying a toy range to Tesco stores in Central Europe. Suppliers’ direct relationships with Tesco will end on 30th October, after the transition period is complete.

You can read the official story here and I wanted to give a little extra context for those processing what this will mean in practice. To say this is a massive development for The Entertainer would be the understatement of the year: when the trial was first announced and I asked Gary what impact it would have on the business if it was ultimately expanded to the whole Tesco store estate, he admitted it would be a complete game changer – “the biggest thing to ever happen to The Entertainer”.

Both the Republic of Ireland and Central Europe are completely new markets for The Entertainer – and to roll out The Entertainer branded toy departments to over 750 UK & ROI stores with incredibly high footfall levels is a massive opportunity. That rollout will start in March, and I understand it is likely to take around 6-7 months to convert all the stores: some have only 2-3 bays, but others will have up to 25 bays.

Understandably, Gary is beyond excited: “It’s good for both Tesco and The Entertainer. For the partnership to work, that has to be the case. I think it’s also good for the toy industry as a whole, and an amazing opportunity for our 1800 staff to grow their careers with the joint operation.”

Of course, not everyone will be as thrilled as Gary – some suppliers have long-term relationships with Tesco and may not operationally be as close to The Entertainer. Gary’s message to those people was unequivocal: “I say this to all current suppliers of Tesco’s toy department, and anyone else who wants to be part of it in future – come and talk to us. Geoff Sheffield is the man to talk to. He will be available to sit down with every supplier to discuss what the future looks like and to look at where there is common ground. Even if you don’t currently deal with us, the door is not closed.” I have a feeling that Geoff is going to be a very busy man indeed in the coming months.

I also think this development highlights the fact that unless a grocer (any grocer, to be fair) is prepared to put in place a team of specialist, dedicated toy buyers who stay in their roles for several years, learning the intricacies of the toy market and building strong relationships with suppliers, it will be difficult for them to reach anywhere near their full potential.

Elsewhere, the situation out in the Red Sea remains complex, volatile, unpredictable – and deeply concerning for freight forwarders and importers. Long story short, from what I can gauge talking to people in the logistics field, things are likely to get worse before they get better – and ‘better’ might even be as far as 3-6 months down the line. Rates for a 40ft container have almost doubled to over $7k this week alone, giving importers some tough decisions to make. Industry insiders say this situation could end up having an even greater impact on the global economy than the EverGiven fiasco, with 30% of the world’s container traffic traditionally going through the Red Sea. To make matters worse, containers are now getting stranded in places across the world where they shouldn’t be, and there are rumours that insurance companies will soon withdraw cover from ships that decide to risk using the Red Sea route, making the longer / costlier Cape Horn route unavoidable.

And there is nothing much anyone can do, although here’s one thought – should retailers scrap any fines for late arrival of shipments until things settle down? Some importers will currently be working out whether it is cheaper to pay the fine or swallow the short-term rate increases – a tough equation to balance in some cases. We could certainly do with a bit of that ‘Dragon luck’ in the Red Sea right now.

One thing’s for sure, there will be plenty to talk about for those of us making the trip to Hong Kong in the coming days. I head off later today, for my first visit to the region since January 2020 – just a few short weeks before the world changed. I hope to see as many of you as possible while I’m out there, so do feel free to drop me a message if you would like to meet up next week.

As retailers often contact me when one of their retail competitors does something daft on pricing, I am genuinely thinking of introducing a new column naming and shaming the perpetrators – maybe we could call it tw*t watch? This week it’s been the turn of Game to induce groans of frustration from toy retailers, having reduced all the brand-new Lego January launches by 20% on day one (insert face palm emoji here). Several specialist multiple retailers had apparently already broken the embargo by putting the new items on sale before Christmas, but a blanket 20% discount from day one raised the retail community’s blood pressure several more notches. Maybe I’m being naïve, but it just seems daft to me – and surely unnecessary? Anyway, welcome to tw*t watch… more to follow no doubt.

And finally, keep a look out for our January issue, which should be arriving any day now – if you get a knock at the door, it’s probably because it won’t fit through your letter box. I just hope your postman has been in the gym over Christmas preparing – we don’t want to give him a hernia. Happy reading when it does land on your desk – and the digital version will be online on Monday.

Festive frenzy … it’s the Christmas Blog!

Yep, we’re still here plugging away, ironing out the last little foibles on our January issue and making sure it will be a thing of beauty and wonder when it lands with an almighty thud on your doormat early in the New Year. Hopefully by the time you read this – my final Blog of 2023 – we’ll be dotting the final i’s and crossing the final t’s, before our designer Mark has the unenviable task of uploading the spectacularly huge file to our printer’s portal.

Of course, while it is the last working week of the year for many of us in the toy community (and some have already clocked off for the year), I appreciate that for retailers, it is a crucial week. And it’s followed by another massive week after the big day, when many consumers will hit the shops a) to see what is in the sales, b) because they have money or vouchers to spend or c) because they just need to get up from the sofa and out of the house. Whatever their motivation, retailers will be happy to see them (unless they’re bringing products back, of course…).

I’ve read a couple of LinkedIn posts from retailers this week saying that despite the lack of buzz and an absence of the kind of festive frenzy they were hoping for, they’re still trading up on last year – and in the end, the numbers are all that really matters.

On the retail front, we also unveiled the nominees for the Retailer of the Year Awards 2023 earlier this week. Congratulations to all the retailers who made the shortlist, and commiserations to those who just missed out. It is never easy to whittle down each category to only three potential winners. I look forward to finding out who has ultimately triumphed at the presentation during Toy Fair.

I also received a rather bizarre press release this week, highlighting a survey which suggested that over half of small business owners will be working on Christmas Day. According to the survey, many will spend time answering emails, while others will perform general admin tasks like paying wages or checking invoices. I am not sure I entirely believe this survey – I certainly hope it has just been completely made up to flog some kind of business service. Because if it is true, it’s a bit sad. Business owners – small, medium and large – work hard enough all year. Taking a few days off around Christmas is important. You’ve earned it. Whatever needs attention can wait a few days or should be done beforehand. I am not saying this from any particular religious standpoint – more from the perspective that we all need time off to recharge the batteries from time to time, and to spend time with our families.

Whoever was asked to fill in that survey, I can pretty much guarantee that it wasn’t anyone from the licensing community. I received a WhatsApp message from a licensee friend on Monday who had tried to email a licensing contact, only to receive an out of office reply saying that the person wouldn’t be back until 8th January. If his reply was on the latest episode of Sesame Street, his comment would have been brought to you by the letters F (repeated) and S. Although maybe small business owners should be ‘more licensing’? I doubt you will catch many of them working on Christmas Day… (insert your own punchline).

Meanwhile, back in the real world, who had ‘toy shipping disrupted by Huthi rebels’ on their 2023 Bingo card? It appears that the scamps have been targeting ships sailing through the Red Sea with drone attacks, presumably having watched the new series of Vigil and thinking ‘ooh, now there’s an idea we should try.’ In fairness, I shouldn’t be making light of this. Apart from the obvious danger to the ships and crew operating them, the decision by many shipping companies to avoid the Red Sea completely could have significant repercussions for the wider business community.

For toy importers, extended lead times by anything up to two weeks are looking likely in the short term. The diversion being proposed to avoid the Red Sea – a route around Cape Horn – not only takes longer, but will eat up more fuel, which means the shipping companies will surely be looking to offset their increased costs by putting up container prices, just like it was 2022 all over again. Thankfully, this is not a time of the year when many toy companies are bringing in large numbers of containers, but outdoor toy suppliers and companies with big Easter launches will no doubt be keeping a close eye on proceedings. It’s not just the UK either – the US is also likely to be affected if the situation isn’t brought under control swiftly.

On top of that, the Red Sea is apparently the main route for much of the UK’s oil supplies, prompting fears that the price of petrol, which has finally been coming down to a more sensible level, could well bounce back up again. Seriously – and I can’t stress this enough – NOT NOW HUTHI REBELS!

As this is my last Blog of 2023, I just wanted to wish all of our readers across the globe a joyful Christmas and a Happy – and above all Peaceful – New Year. Once our printer confirms that the January issue has been uploaded successfully, we’re out of here to enjoy the festivities – Anita and I have our first Christmas with our granddaughter to look forward to.

The Toy World team will return to the office on Tuesday 2nd January, and the email newsflash service will resume on the same day. Until then, you’re on your own. If any major stories break, I might put a line on LinkedIn, but that’s about it. Have a fantastic festive break and bring on 2024. It has to be an improvement on 2023…surely?!

Winding down for the holidays? Yeah, right… it’s the Friday Blog!

Someone sent me an email this week which opened with the phrase: “I hope you are winding down now ahead of the holidays.” As if – clearly that person isn’t overly familiar with what we do. For the uninitiated, there’s just the small matter of our (massive) January issue and first-ever standalone Nuremberg supplement to send to press before we break up for Christmas. If you want a comparison, right now at Alakat Towers it’s a bit like wandering around Toy Fair on the afternoon before opening day, when it resembles a building site. You look around and think “there is no way on earth this place is going to be ready to open tomorrow morning.” And yet when you turn up at 8.30am the next day, by some miracle, everything looks pristine and ready to go – as if the carnage of the previous day was just a bad dream. Hopefully we’ll be in the same position come next Thursday. Until then, it’s ‘all hands on deck’ and just a bit frantic.

Hopefully it’s the same for retailers. After a slow start to the festive season, I have seen an increasing number of encouraging social media posts over the past week, indicating that things are finally picking up out there. There will be those who say it’s too little, too late – and impossible to make up the ground lost in October, November and early December. However, at least sales are finally accelerating. I have said it before, but the next 10 days are going to be crucial – this weekend and next weekend can still be game changers.

One of the big challenges now will be how many retailers’ warehouses are still open to receive deliveries. I am even hearing reports of gaps opening up on some shelves, giving retailers the decision as to whether to replenish or just stick with what they have and hope that if consumers can’t find exactly what they want, they’ll buy something else instead.

It would be good to finish the year on a high, and hopefully with as clean stock levels as possible – we really want to head into 2024 without the excess inventory which blighted the first half of this year. It will be fascinating to see where it all lands as we catch up with the toy community when Toy Fair Season starts in January.

For the first time in four years, I will be heading back to Hong Kong in the first week of January. It will be the 50th anniversary of the Hong Kong Toys & Games Fair next year, and I am very much looking forward to joining the show to celebrate this milestone. The Fair was paused for a couple of years, and although it returned in person last year, it was largely a local Asian market focused event. So, next year will realistically be the first opportunity to assess how many people from the international toy community will return to Hong Kong in January. Speaking to a couple of companies based out there, diaries are beginning to fill up nicely. On which note, if you want to grab some time with me during the trip, feel free drop me a line.

After returning from Hong Kong, we have both the London and Nuremberg shows to look forward to. London will be celebrating a milestone of its own in 2024, as it hits its 70th anniversary. Then it will be on to Nuremberg to bring things to a close, as the traditional finale to Toy Fair Season – the New York Toy Fair – is on hiatus for next year (at least). From London and Nuremberg’s perspective, the fact there is no US show can only be a positive: in the past, some of the larger US companies held new launches back to be unveiled in New York. Now that the US event is on a temporary sabbatical, suppliers can reveal the hot new lines in London and Nuremberg instead.

Don’t forget to register to visit all the Toy Shows (Toy Fair here, and Nuremberg here) – and while you are about it, if you are planning on visiting the Licensing Expo in Las Vegas next May, you might want to sign up soon too. Amongst a raft of new initiatives announced this week, there will be an admission fee of $50 which will apply to many attendees for the first time, including licensees, licensing agents and service providers (but not retailers). There is a limited time discount enabling free registration for people who attended this year’s show – as long as you register by 31st January. After that, the admission charge will apply. It’s all part of the shows ‘Pathway to Reimagination’, which will see even bigger changes coming for Licensing Expo in 2025. More on that in due course.

Obviously the biggest – and saddest – news of the week came from Hasbro, which announced 1100 further job losses, on top of the 800 roles that were already lost earlier this year. It goes without saying that it must be hugely disappointing news for those people affected, especially hearing about it just before Christmas (presumably so it is off the books before Q1 earnings are announced). I am not going to dwell on this latest development or pontificate about what has led to the decision. I have been around the trade long enough to see the fortunes of the global toy giants ebb and flow: it wasn’t that long ago that Mattel was having a hard time and look at it now. Clearly Hasbro does need to make some changes, but I hear good things about the people at the helm, and I believe it will bounce back from adversity.

Finally, congratulations to Tony White and Valerie Leuzy on joining Wow! Stuff as general Sales manager and head of European sales respectively, all the best to retailers everywhere for this weekend’s trading and I leave you with this meme, which is for all the toy companies who post on LinkedIn how proud they are to be one of eight companies nominated for one of twenty awards and haven’t quite twigged what is going on yet…

Money’s too tight to mention … it’s the Friday Blog!

As discounting continues unabated at retail, I have come to the conclusion that the pricing bloodbath of the past few weeks has come from a very straightforward place: ultimately, I very much doubt it’s about ‘buying market share’ or driving sales of food & drink or other categories (the grocers are often accused of this, and whenever I speak to them about it, they almost laugh at the idea that this is their cunning plan). No, the simple truth is that retailers are sitting on way too much stock.

Did they overbuy? Maybe some did on certain lines. But I can’t countenance the notion that just about every retailer overbought on that many lines. Which leads me to the inescapable conclusion that retailers are just not selling as many toys as they had hoped – or anticipated. I don’t think it is because the current crop of toys is not compelling. I don’t think it’s because marketing activity hasn’t made consumers aware of what is out there. And it certainly can’t be the pricing, as the deals on offer have reached the ‘highly competitive’ stage.

Which basically leaves the uncomfortable truth that the cost-of-living crisis has bitten harder than we had all expected. The toy community has long fallen back on the adage that toys are recession proof, but this is certainly no ordinary set of economic circumstances. Unicef has revealed that the UK ranked 28th out of 39 developed countries when measured on its most recent poverty rate. An appalling 20.7% of kids were in poverty during 2019-21. And if anyone doesn’t believe that figure has got significantly worse over the past two years, I have a bridge to sell you.

Just think about that: one fifth of our target audience is in poverty – maybe that number is even up to a quarter now? That’s a big chunk of our potential customer base affected. I am not writing this to depress anyone – I think it’s valid to bear in mind that much of what is happening right now is largely outside of our control, and no-one’s fault. The finger of blame over price-cutting has been pointed in so many directions recently – and I can understand why retailers are so exasperated.

But maybe the real blame lies with a government that is more obsessed with dinghies than sorting out the very real financial mess that it has got us into. Rather than putting vast sums of money in the hands of a few (donors), spreading it around the general population would surely benefit all businesses infinitely better. They’ve had 13 years – hopefully they won’t make it to 14 and beyond, and we can work our toy magic on consumers who aren’t watching every penny in 2024…?

A quick warning to be wary of scammers – they do have a habit of creeping out of the woodwork at this time of year. One toy supplier flagged up that he had received a request for immediate delivery of stock purporting to be from Austins department store – which turned out to be entirely fraudulent when delved into. That’s the kind of devious behaviour that can sometimes catch companies out – using the name of a reputable retailer to catch people off guard who are a bit busy or so delighted to get an order they don’t look too closely at the detail.

Reassuringly, beyond the immediate short term, there are some really positive developments as we head into next year. The Toymaster May show is already sold out – earlier than ever. Ravensburger’s Lorcana is flying, and the third instalment of the game has just been confirmed for February – once again, the specialists will have a valuable two-week window before it lands in the majors (smart move – if it ain’t broke, don’t fix it). Mattel has signed a deal to produce a range of Wednesday toys, which will sit in its Monster High and Fisher Price Little People Collector ranges.

And last weekend’s Fence Club Christmas Party was not only a fabulous event which brought the toy community together for an evening of festive fun, it also raised an incredible £75,000 for the children’s charities which the club supports – a marvellous effort all round.

It has also been announced that Sainsbury’s will be moving to a new head office. After nearly two decades at its current location, the retailer will be moving to the sustainable JJ Mack Building in London’s Farringdon after the lease at its present head office on Chancery Lane expires in 2025. Hopefully its buying team will be so impressed with the new facility that it will want to spend a bit more time there…

Away from the UK, there has been plenty going on in the North American market too. It looks like Mastermind Toys has been saved from closure after a bid from Unity Acquisitions was accepted. The new operation will maintain 48 stores and close 18 – which should see a good portion of the 800 employees kept on. There was a story in the week which suggested that Toys R Us had been in talks with Mastermind about a takeover several months ago, but that the Canadian equivalent of the Competition & Mergers authority intervened on the grounds it would reduce meaningful competition in the market. Quite how they reconcile that nebulous possibility against the loss of 800 jobs would be interesting to evaluate.

Finally, as I first picked up during the New York Toy Fair, Toy Association president Steve Pasierb will be stepping down from his role when his contract ends in April. We wish Steve all the best with whatever comes next, and we wait with interest to see who his successor will be. Whoever it is will have some big decisions to take on the future of the US Toy Fair and what role the Toy Association can play in the whole ‘LA situation’.

That’s all for this week – I am keeping everything crossed for the next three weekends, the last one in particular, when many people will have just been paid. It really could go down to the wire this year.

Forget about the price tag … it’s the Friday Blog!

As we head into the final stretch, the industry remains laser-focused on getting the most out of the festive season (or just on making it to the end of the year, depending on your perspective). Black Friday weekend has come and gone, and typical of this unpredictable year, the results were decidedly mixed. There is a general feeling that High Street footfall was up across the country, although some areas clearly fared better than others: London was apparently heaving last weekend, but I have read posts from retailers in the provinces saying they were mildly disappointed with store traffic. Our local high streets in Hertfordshire reflected the inconsistency: last Friday was packed in town, but the weekend seemed markedly quieter.

I have also read reports that even though footfall was up, sales declined slightly – perhaps people went in search of incredible offers that they didn’t find, or maybe they are just being more careful with their spending this year. There’s no doubt that Black Friday has become an integral part of the UK retail landscape, but I wonder if consumer expectations of offers are unreasonably high? Because make no mistake, some of the deals flying around on toys really are quite amazing, and they should have been more than enough to drive sales.

Sainsbury’s Argos was one of the retailers quoted as enjoying strong Black Friday sales on toys, although tellingly it singled out sales of Lego and Duplo – and anyone who has entered a large Sainsbury’s store over the past couple of weeks will have noticed a rather swish Lego branded FSDU prominently placed at the store entrance, offering 33% off all the products on the unit. Given Lego’s average margin, that’s quite a generous offer, so perhaps no great surprise that it had the desired effect – I just hope everyone made some money from the increased sales.

As the week went on, Argos was back in the spotlight after sending out an email to customers promising “up to 70% off toys.” I clicked on the list and, as if to reinforce my previous point, the offers were certainly incredibly generous. It didn’t take long for other retailers to start sharing their thoughts online, with Midco’s Dave Middleton perhaps summing up what the majority of toy retailers were thinking: “Go home Argos…you’re drunk.”

It’s a tough one for me to comment on, as I don’t know what sort of internal pressure the toy team are under from buying or finance directors. I think we have to assume that they must have a lot of stock to shift. Interestingly, at Toy Fair last year, I had a really good chat with one of the Argos buyers, who took the time to explain to me how the Argos business had changed since its heyday – it gave me a new way of thinking about the business, which at the time seemed entirely logical. Maybe I had still been thinking about the Argos of the past, the retailer that placed big bets and had the legendary catalogue to drive sales. A retailer that was historically more focused on volume and market share than profit. The new Argos, I was told, is quite the opposite; happy to work on lower volumes but crucially making a profit in the process.

So, what happened? Did they place orders that were too big for the new business to drive? After all, with no catalogue and a small space tucked up at the back of Sainsbury’s stores, they don’t have the same ability to drive sales as other physical retailers who display stock. Did suppliers receive big orders and think “wahey, Argos is back baby”, rather than wondering if the numbers were realistic, and whether they should actually ship the numbers requested? Or is it just that consumer demand hasn’t materialized to the anticipated level?

No-one is pretending it is easy out there, and the UK isn’t alone – the fact that specialist Canadian retailer Mastermind Toys filed for creditor protection last week vividly illustrates that. And I gather that UK retailers are already starting to play the game of pointing the finger at each other in terms of who is responsible for slashing prices first. However, although it’s a challenging economic environment, it’s also worth bearing in mind that there are no big new console launches to suck money out of the toy pot this year – that really should be working in our favour.

So, what can be done to stimulate consumer interest in the final weeks? For starters, don’t underestimate the power TV still has to bring product to the attention of the masses – as is evidenced by the impact of Ireland’s phenomenal Late Late Toy Show, which broadcast last Friday. Suppliers saw an immediate impact on sales and online searches, after 1.7m people tuned in to watch the show. Why we don’t have a UK equivalent is completely beyond me – surely that’s a gap for some enterprising broadcaster to exploit? And our highest-read story of the week – the relaunch of the Master Replicas Doctor Who statue range – was surely the result of consumer interest driven by the return of the show last week. It was an encouraging first episode, a return to form for a show that had arguably lost its way in recent years. It went back to what it did well, and I suspect that will work in its favour. Maybe a lesson there…?

Finally, the December issue of Toy World has been landing on desks this week and is available to read online. It’s our final issue of the year – and nice to know that we made it right through the year with every issue published bang on time. Now it’s full steam ahead for our bumper (and I do mean BUMPER) January issue. As always, we’re going to start the year off with an almighty bang. If you want to make the most out of Toy Fair Season, don’t miss out. In fact, we’re so busy that we’ve taken on not one but two new editorial recruits to help us out – so please give a warm toy trade welcome to Caroline Tonks and Gabriela Jimenez Garcia as they join this wonderful, crazy industry. After more than 40 years, I’m still happy to embrace the craziness…

The price isn’t right… it’s the Friday Blog!

Much as it pains me, I feel I have no choice but to start this week’s Blog off with some thoughts on the topic that is on everyone’s lips at the moment – price reductions in the toy aisles. One retailer sent me a message with a fairly blunt summary: “I’ve never seen anything like it in all my time in toys… it’s like a real-life Amazon marketplace out in the stores.”

I homed in on one particularly egregious example of selling below cost a few weeks ago in the Blog, but to be fair it’s now reached the point where it is pretty much going on across the board. I suspect much of this activity is ad hoc, rather than being meticulously planned: the nature of the in-store promotional material rather gives it away – not glossy and pre-printed, but hastily knocked up on the store photocopier using coral draw or some other ancient computer art program.

And the promotions aren’t limited to higher priced items, as you might think; there’s plenty of activity even at sub-£10 price points, sometimes featuring brands that are consistent sellers all year round. I saw one sign proudly proclaiming “10% off everything” – literally, nothing was off limits, so presumably that isn’t being funded by targeted supplier contributions.

I am secretly hoping that some of those people responsible for these price cuts find their way into the travel & tourism industry (have you seen the price of hotels recently?!), or perhaps flower/prosecco suppliers in time Valentines Day. We do seem to be something of an anomaly, in that the toy market cuts prices ahead of our peak period. I doubt we will ever see travel prices slashed in July and August. I worry that it sends a message out to consumers that toys are over-priced and don’t have intrinsic value, which I really don’t think is the case.

Of course, I am not sitting where buyers and store owners are sitting; I don’t know how much stock they are sitting on, or how the rate of sale compares to previous years. I’m not at the sharp end, speaking to customers every day, assessing what is going to make the difference between a sale and a walkout.

Our editorial team has been speaking to a wide selection of indie retailers in preparation for our bumper January issue this week, and the overwhelming consensus is that customers are being more careful and thoughtful with their purchases than ever. They’re looking for value, for toys that will be played with again and again – and in many cases, where they might have been considering £50+ items in previous years, it’s more the £30 price point that is the sweet spot this time round.

I guess that consumer finances are driving this behaviour. Despite newspaper headlines celebrating so-called tax giveaways by the Chancellor in this week’s autumn budget statement, most people aren’t stupid. They know that the freezing of tax allowances exceeds what they are being given back by the reduction of national insurance levels, and the increase in the fuel cap in January – announced the day after the budget statement – won’t have helped either. Yes, there are encouraging measures – including an increase in the living wage – but I think we have to accept that this year, some consumers will be adopting a more frugal approach to festive spending.

Next year will almost certainly be different, if only for the fact that the only way the incumbent government is likely to win the coming election is by offering even larger financial bribes to the electorate– we’ve seen this week that normal economic consensus goes out of the window when an election is looming.

There have been some bright spots amongst the price wars: queues built up outside many specialist retailers at dawn last Friday for the launch of Ravensburger’s Lorcana Series 2. I bet there weren’t any retailers cutting the price on that! This also neatly illustrates the importance of Kidults to the toy market: I know we all talk about it all the time now, but it’s times like this when you really see the power of the Kidult demographic in full swing. They’re passionate fans, they want what they want, and they have the money to buy it. I am sure those toy retailers that are fully embracing this group are reaping the rewards, and perhaps those that have yet to dip their toe in the water might be tempted to give it a go in the New Year.

So, let’s see what Black Friday brings – I haven’t noticed a huge amount of toy activity on Amazon so far, but maybe that will change this weekend. Another strong footfall weekend in physical stores would also be most welcome, as the window for placing final Christmas re-orders is getting very short indeed.

And for those (few) companies that haven’t yet booked their spot in our bumper January issue, now is the time to get in touch – we genuinely are getting down to our last remaining slots now. It’s going to be another belter, and the one magazine that everyone is going to be eager to get stuck into early in the New Year. Whatever happens between now and the end of the year, we all go back to zero on 1st January and start the process all over again. Everyone assembles at the same starting line, aiming to secure listings from buyers who also all have blank pages at the start of the year.

As we head into Thanksgiving weekend, I’d like to wish a happy holiday to all of our American readers. Entering into the spirit of the occasion, I am thankful to be working in the rather wonderful toy community and thankful that we play our part in it. We may not make or sell toys, but we do help to keep everyone in touch with what’s going on, with everything you need to know all in one place….and I think that’s no bad thing.

Slow and steady wins the race …it’s the Friday Blog!

In last week’s Blog, I suggested that a little patience was needed, and that I remained quietly confident that an upturn in sales was coming, after a lacklustre October for the UK toy market. I headed into my local town centre (Watford) last Saturday, and as soon as I hit the ring road, traffic was noticeably heavier than it had been for weeks. By the time I reached the High Street, it was clear that many more shoppers were out and about. I gather the same was true on Sunday. I messaged a few retail friends based across the UK, and they confirmed that they had experienced a similar increase in footfall across the weekend.

It’s a small sample base, and purely anecdotal – nevertheless, I do feel that we have passed the watershed and are now properly into festive trading season. We’re collectively a little way back from where we would ideally like to be at this stage, but we’re up and running. Don’t forget, December wasn’t that great last year, after the success of the consumer messaging about buying toys early in case stock ran out. So, we may be in a bit of a ‘tortoise and hare’ scenario here: we went out like a train last year and tailed off the closer we got to the finishing line. This year, we started slowly but the pace is picking up. I have no idea where we will end up, but I still believe it is too early to write the year off just yet.

We have Black Friday next week, an event which has expanded way beyond the confines of the Amazon platform. Retailers across the spectrum have looked at how they can take advantage of consumers in the mood for deals, and there undoubtedly will be plenty of tempting promotions on offer. The fact that everyone does it now has probably taken the edge off Amazon’s Black Friday performance, but it will still be interesting to see if it has more impact than the rather underwhelming Prime Big Deals Day in October (certainly as far as toys is concerned).

Amazon has been in the spotlight again this week, after well-known toy stalwart Nico Blauw wrote a post on LinkedIn which laid bare the challenges he and many other toy companies are facing with providing proof of IP ownership. Since the new rules came into force earlier this year, it seems to have become increasingly problematic for suppliers, as Nico points out: “Despite the clear proof of IP ownership and a copy of executed license agreement, Amazon claims that is not enough. They want the brand owner to send them a LOA. I thought this is what licence agreements are for? Getting a visa for North Korea seems less time consuming than getting approval to sell your very own products on Amazon. But not necessarily if you are in the business of selling counterfeits, as we continue to see tons of knock offs appearing on the platform.”

Herein lies the conundrum: it appears that legitimate companies are coming under increasing pressure, yet the knock-off merchants appear to still be getting away with it. I wonder if this is simply because it is easier to go after legitimate companies. They have proper contact details (and don’t change company name or address when challenged) and are more willing to engage with Amazon directly than dodgy dealers. I suspect there could also be an organisational issue: an established retailer’s buying team would have a pretty good idea which suppliers were legitimate, and which could potentially be dodgy. I guess the sheer breadth of Amazon’s seller base makes that almost impossible. However, it does appear that there is no-one internally who is willing or able to point the Amazon Inquisition in the right direction when it comes to potential counterfeiters, or to put in a good word for reputable companies.

In terms of Black Friday as a whole, I hope it drives sales without sending a wrecking ball through pricing. Although rather intriguingly, when I talk to indies about some of the most brutal price cuts in the market, it’s not necessarily the grocers, Amazon or even the likes of B&M or Home Bargains that they mention, but instead large specialist toy retail chains. And on the subject of the grocers, I hear there are some big changes afoot at the head of one of the toy buying teams – more news in next week’s Blog. Always seems to happen just after buyers have been conducting previews for some reason…

There’s lots more brewing as we head towards a new Year: Zuru has appointed AB Gee as its exclusive UK distributor for accounts other than the majors, which is a smart way of broadening availability for Zuru’s range in retail channels that aren’t able to buy FOB directly. I also hear whispers that some retailers are looking to expand their FOB commitment next year, as the fight for margin and differentiation becomes increasingly important.

Today is also a big day for many indies, as Series 2 of Ravensburger’s Lorcana is released – I gather there were queues outside some stockists at 7 am this morning, so they look set for a good day. And kudos to Ravensburger for giving the specialists a two-week window before it goes trade-wide – at least they know those retailers won’t do anything daft on the pricing and they’ll really appreciate having something which really boosts footfall at this crucial time.

Amidst the cut and thrust of festive trading, it is heartwarming to see that the toy community continues to be generous in giving back to help those kids and families less fortunate than us. This week alone we have announced the return of both The Entertainer’s Big Toy Appeal and Lego’s brilliant Build to Give campaign, now in its seventh year; plus, we highlighted Crayola’s support for the wonderful Spread a Smile charity and also a world record jigsaw attempt which is aiming to raise £10,000 to donate puzzles to a selection of local charities including Sheffield Children’s hospital. And, of course, in a couple of weeks’ time, we have the Fence Club Christmas Party to look forward to, a great evening of festive celebrations which raises valuable funds for the children’s charities which the Fence Club supports. I am sure there are many more charitable initiatives going on across the toy community right now, and many families that will be immensely grateful for the toy community’s support in challenging times.

 

Venceremos… it’s the Friday Blog!

Never has the phrase ‘yesterday has gone’ been more appropriate. Forget about the September and October Circana data (for now at least, there will be plenty of time for post-mortems later) – it’s all about what happens in the next six weeks. The stakes are sky high: around a third of the toy market’s annual turnover is likely to be concentrated in this narrow time frame. Between now and Christmas, a weeks’ sales will often be the equivalent of a normal month’s sales. And we have a bit of ground to make up…

Which is why the annual DreamToys media event remains vitally important – in many respects, it fires the starting pistol on the race to the finishing line. Some have wondered whether the event should take place earlier, but in a year like this – when sales across September and October have been on the soft side – it seems perfectly timed, allowing the toy community to get the message out when it can have maximum impact on consumer behaviour.

There will always be minor gripes about DreamToys (which toys make the list, the focus on the larger toy companies, the venue etc.), but in the end, only two things really matter: does the event drive media coverage and is there a spike in toy sales as a result? We won’t realistically be able to assess the impact on sales for a few days at least, but we already know that coverage was decent: over 250 print and online articles, including most of the key nationals, plus almost 100 radio mentions. TV coverage is a bit thinner on the ground than it used to be, but times have changed – albeit the loss of support from This Morning in particular is a shame for DreamToys (toy companies who featured in the show’s own toy segment last week say they saw an immediate uplift in sales).

Crucially, when you compare coverage levels to media interest in the individual retailer’s top toy lists which have been announced over the past couple of months, DreamToys wins hands down. Intriguing sidebar: consumer media indifference to the individual retailers’ lists led to Toy World having our best-ever online traffic month in October. Because we rank high on Google, consumers searching for those lists tended to come across our story, boosting our numbers significantly.

But I digress: the key point is that DreamToys still delivers consumer eyeballs in a way that the individual lists don’t. Sure, there may have been a couple of key omissions from the list: personally, I would have gone for something like Eolo’s Biggies, which would have looked great in photos. And like others, I was perhaps a little surprised by Furby’s absence, reputedly as a result of the timing of the selection vote, literally just as Furby stock was hitting stores – I wonder if there is an argument for a ‘wild card’ entry to be decided a bit later, to allow a few more weeks for brand new launches to take off? But when you have to whittle hundreds of fantastic toys down to a final list of 20, there will always be some great lines which miss the cut by a whisker.

However, as I have said before, while toy companies love to make the DreamToys list (and others are understandably disappointed when they don’t), the most important message is about getting consumers off the couch and into stores to buy toys – not just those on the list, but every other toy on shelf. If DreamToys is a success, everyone wins.

What we arguably don’t need are rogue voices adding a note of negativity into the coverage – which is why I was a little disappointed to see the BBC quoting someone on the DreamToys list who a) has little to do with the toy market and b) wasn’t even at the event. Instead of giving a nice positive quote about toys in general, Gary Pope (a man who is never shy in letting everyone know his opinion on pretty much everything – I fully expect him to pop up on Match of the Day this weekend giving his two pennorth on the latest VAR controversy) decided to come out with the rather naïve opinion that the DreamToys list should be decided by kids. I mean, seriously, where to start…?! Here we are as an industry, carefully curating a list of toys to create a narrative for media and give valuable support to retailers and suppliers by kickstarting literally hundreds of millions of pounds of sales, and Gary wants a room full of 5-year-olds to make those vital business decisions, rather than the UK’s most knowledgeable and experienced toy retail professionals. I guess he thinks that the Children’s BAFTAs should do likewise? And every other award ceremony too (I look forward to him telling Max Publishing to scrap the judging panel for the Licensing Awards). Does he appreciate the way in which the event is structured and ultimately funded? Or the painstaking democratic process by which the list is arrived at?

Anyway, let’s dwell on the positives and look forward, not back. The toy community has spread the word far and wide this week: let’s hope that results in an upswing in sales. I know that many will be disappointed with the October Circana numbers, even if we did all have a rough idea of what was coming. But I am siding with the ever-optimistic Isaac Larian on this point – his LinkedIn post from this week sums it up rather succinctly:

“I have been doing toys for 44 years.
Every late October and early November I am asked by retailers “what’s going on? Toys are soft”.
This is what I call “October/ November jitters “.
Christmas is on DECEMBER 25 this year (again) and TRUST ME, IT IS COMING.
Toys will be soft till Black Friday (This year, more than ever before, consumers are looking for deals).
Families, friends, grandparents will ALWAYS buy toys for their loved ones. children. They will cut from other areas to do this.
Christmas will come and then we are back to the same cycle for next year.
NEW ORIGINAL innovations will win. Again.
Happy holidays.”

Hold your nerve. Keep the faith. Holidays are coming. Venceremos! (we will prevail). #PutABowOnIt (catch phrase of the year!)