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.