You can tell you are in the depths of summer when ‘out of office auto-replies’ take over your inbox – this week, they have almost outnumbered ‘proper’ emails at times. Thankfully, the majority of toy retailers remain extremely busy, with the volume of people staying in the UK for their holidays this year giving a welcome boost to summer trade across the UK and Ireland.
If business as a whole has been brisk, it has been especially fruitful for the ‘seasiders’, while I am told that Ireland has also been buoyant. I gather that footfall is now improving in shopping centres too, after a relatively slow start post-lockdown. Encouragingly, sales of higher ticket items seem to be holding up, which bodes well for Q4, while I am hearing that there has been little push-back from consumers to the price rises which have been introduced so far.
Traditionally, summer in the toy trade represents the calm before the storm – a chance to get organised ahead of the coming festive season. I get the impression that a healthy number of retailers have taken the message about potential product shortages on board; many of those we spoke to for our forthcoming September issue said they had brought Christmas orders forward this year as a precaution. Hopefully it won’t be too long before the penny drops with other retailers – this year, the traditional independent ‘stock and order’ approach will surely need to be adapted to fit the prevailing supply chain conditions.
The message about potential shortages seems to be getting through to consumers too. The Entertainer’s Gary Grant has been banging the drum loudly across national media in recent weeks, ably supported by other toy retailers reinforcing the message. The media coverage will hopefully help to encourage shoppers not to leave festive purchases to the last minute this year, as has sometimes been the case in the past.
Assuming that message cuts through successfully, Christmas sales should start to kick in over the coming weeks – giving retailers a great opportunity to continue building momentum from a decent summer (despite the ‘typically British’ weather). It hasn’t been an easy year by any means, but with first half toy sales comparing favourably with both 2020 and 2019 (albeit there will be some big anniversary numbers rolling round soon), the toy community has once again showed its ability to overcome adversity and find a way to navigate the challenges.
I mentioned a few weeks ago that over in the US, Walmart and Target were making space available in their own containers for certain key suppliers: word reached me this week that a certain UK retailer has gone so far as to charter its own ship to facilitate the smooth flow of goods to stores – another perfect example of the resourcefulness and sheer persistence of the toy community.
While not everyone can take back control of their own destiny in such bold fashion, there have at least been a couple of encouraging developments on the supply chain front this week: China State TV broadcast a story last weekend, suggesting that the Chinese government was prepared to step in with practical measures to help combat the supply chain crisis, instructing state-owned enterprises to extend the number of available ships and routes, as well as increase the production of new containers. Despite the fact that The West has borne the brunt of the supply chain challenges, there is no doubt that ‘Brand China’ has taken a bit of a battering: with some companies exploring the possibility of bringing production home – or closer to home – it is perhaps no surprise that the Chinese government wants to do what it can to prevent that trend from escalating.
In addition, the Ningbo port problem I mentioned last week has thankfully not developed as feared: the closed Meishan port is due to partially re-open any day, while the number of port calls missed during the closure wasn’t as great as had been anticipated, with the majority of carriers diverting to other nearby terminals. Bullet well and truly dodged…
In the end, apart from a handful of major retailers, supply chain issues are largely out of the wider toy community’s control. So, as we approach the business end of the year, the key is to focus on the things we can control and maximise the next four months’ trading opportunities. Consumer demand shows little sign of slowing down here, although there are indications that it might be cooling over in the US – although that could be a good thing for the rest of the world, as most shipping companies have suggested that it was the explosion in US consumer demand which has fuelled the increase in global shipping costs. And as we all know, ships don’t lie… (thanks to Steve Asbey for helping to keep the song puns going).
Within a few short weeks, we will also see the return of trade shows, with the Autumn Fair, the Independent Toy & Gift Show and several Toymaster regional events giving retailers the chance to see products and people in person again. I suspect the vast majority can’t wait for that to happen – and who knows, retailers may even discover the odd nugget or two that they might have missed during digital presentations. Every retailer I have spoken to has admitted that they find it harder to judge new products without seeing them in the flesh, so there may be a few hidden gems out there waiting to be discovered.
The anticipation for the return of trade shows was reflected in a survey conducted by the Spielwarenmesse recently: speaking to over 2,000 visitors from across the globe, it found that over 75% were planning to attend next year’s event. Of course, there are unavoidable caveats that need to be factored in, such as the practicality of international travel and the impact of quarantine restrictions. It is an ever-evolving situation, and we’ll no doubt be returning to the subject of trade fairs as we get close to Toy Fair Season – although the sight of full football grounds in recent weeks is a highly visible beacon of hope for mass events and a welcome continuation of the return to normality.
All in all, with only a couple of weeks of ‘deep summer’ left and peak season rapidly approaching, it has to be said that the toy market is in pretty good shape. Let’s hope it stays that way…