This week saw the UK mark the second anniversary of the first Covid lockdown. Two whole bloody years. An awful lot has happened in that time, including some truly remarkable outcomes that none of us could ever have predicted – for example, two years of increasing sales, despite everything the pandemic and lockdowns could throw at us.
There will be plenty more thrown at us this year, much of which will stem from the prevailing economic headwinds which are currently buffeting the UK. This week’s budget offered a few meagre crumbs of respite – for instance, fuel tax duty took the price of petrol back to where it was… last week. There was also some mildly encouraging news for retailers on the business rates front, albeit only in the very short term – long term, the business rates system remains a mess and badly in need of reform. However, regardless of your political persuasion, I think the general consensus is that the budget was a missed opportunity that failed to address many of the fundamental fiscal challenges that households are facing.
The net result seems to be that there will be an even greater gap between the haves and the have nots. It is not all bad news, by any means: in a survey on leading consumer campaigning website Money Saving Expert, nearly 40% of the 40,000 respondents said that the impending rise in energy bills would have little or no effect on their finances. Conversely, that left 60% claiming they would have to cut back. The OBR budget report was even more damning, stating it expects real household disposable income – widely accepted as the most comprehensive measure of our standard of living – to fall this year at the fastest rate since comparable records began in the 1950s.
So, where does this leave the toy market? Historically, toys is one of the consumer categories that is at least partially protected from the impact of consumer spending cutbacks – there is an age-old adage that says parents don’t like their kids to bear the brunt when times get tough. There is a lot of truth in that, but equally, soaring inflation and the rising price of so many household essentials will test that theory in the most robust way.
We may be in ‘glass half full/half empty’ territory here: understandably, businesspeople tend to look for the positive in situations. If I was looking for the upsides, I would say that many consumers purchasing high ticket toy items fall into the bracket of people who feel they can cope with the current financial turbulence. There is also a wide spectrum of toys on offer at pocket money or competitive prices – the toy market has a far broader entry level offering than many consumer goods categories. And if some expensive purchases are off the table – new car, holidays etc – that may even leave a bit more money in the pot for the kind of regular purchases which drive the toy retail business for 10 months of the year.
Of course, if you are a glass half empty kind of person, you wouldn’t have to look too far to find statistics pointing to some pretty challenging times ahead for many families. It would be naïve to just sweep that under the carpet and pretend thousands of families will not have some very tough choices to make this year when it comes to expenditure. The phrase ‘disposable income’ will be bandied around a lot in the weeks to come – and it will mean very different things to different people. It will be important to cater for all consumers – the ones that still have cash to splash, and those who need to find items that their kids will still enjoy and that offer value, but just cost a bit less. Reconciling that with the inevitable pressure to increase prices will be a delicate balancing act for suppliers and retailers to contend with over the coming months.
Sadly, it has already proved too much for some: the Arcade Toy Shop in Dudley closed its doors earlier this month. Best known perhaps for its legendary ‘Toys Am We’ phase when proprietor Alan Caswell dispensed toys and pork scratchings in equal (large) measure, the store had been in the town for almost 100 years – but it could no longer carry on. It’s not easy being an independent retailer these days, but that said, there are many indies that continue to thrive, as the ‘shop local’ trend which started in lockdown still prevails in many areas.
It is also great to see toy companies stepping up to support the independent channel – witness the incredible window display installed at Midco’s Burton branch by Ty. It all came about after owner Ty Warner saw Dave Middleton’s posts on LinkedIn and decided he wanted to do something special to support him. It just goes to show that a strong social media presence can reap dividends – especially when it is done with honesty, candour and a little humour.
It’s also great to see the toy community continuing its amazing charitable work to support so many worthwhile causes; April will see a band of merry Fence Club members undertake a special charity walking challenge to raise funds for deserving kids’ charities here and in the Ukraine, while the BTHA’s Toy Trust Big Challenge in June will be raising money for two great charity partners, Spread a Smile and Starlight. I hope everyone will do their best to support the people participating in both of these fantastic initiatives – times are tough, but I know that toy people have a heart of gold.
Finally, I was so sad to hear this week that Jake Sivner had passed away – we write many obituaries for people who have enjoyed long and illustrious toy trade careers, but it is heartbreaking when you have to report on someone who has passed away at the tender age of 22, at the start of what I am sure would have been an incredible career. Our deepest condolences to Sinco Toys/Singleton Trading’s Marc, the Sivner family and his many industry friends and colleagues on their sad loss.