Let’s start off with some good news – the pound is back to where it was before the new government decided it would be a laugh to try to tank the economy. In fact, sterling only softened this week when our new Prime Minister was addressing the party conference – so there is a lesson there which will hopefully have been learned…
Despite the recovery of the pound, the events of the past two weeks will have done little for consumer confidence and the broader UK economy; on top of the yo-yoing pound, mortgage rates have increased, new higher energy prices have come into force and OPEC has decided to slash oil production, which is expected to lead to petrol prices rising across the globe – again. No great surprise then that retail footfall has declined for the third month in a row, and even less of a surprise that some of the grocers have already introduced half price toy sales, including Tesco and Morrisons, while Very has also gone early with a fairly aggressive toy promotional campaign.
I was told last month that there was a glut of very good clearance merchandise available – decent products at very attractive prices, not your usual half-price toy sale tat. I guess that may have been a factor in the timing of these sales. Indeed, the offers were so good that one retailer told me that he was clearing as much old stock as he could at – or even below – cost, to give him cash to take advantage of the better clearance deals floating around. Assuming he was right about the quality and quantity of the clearance stock on offer, that is likely to have an impact on retailers’ ordering patterns over the coming weeks. Let’s hope that these great deals attract consumers and encourage them to buy other items while they are in-store.
The other big news from the grocery channel this week saw Tesco announce another round of head office job losses – around 325 roles are expected to disappear in the latest reorganisation. Lest we forget, this is on top of the 1400 or so jobs that were cut back in February. I have no idea whether the latest cuts will impact the toy buying team, but with The Entertainer trial now in full swing, it must be a period of uncertainty for them.
On to better news, the October edition of Toy World landed on desks and online this week – another great issue, featuring a host of fascinating exclusive interviews with some of the industry’s key players and a wealth of new product that is currently hitting shelves. It also features the return of an old favourite on the Inside Back Cover – the market share comparison between us and our competitor. See if you can guess our respective market shares before turning to page 113 to find out what they really are…
In other positive news, congratulations to the winners of the Play for Change awards, which were unveiled this week. Shame I missed the award ceremony in Brussels, but I gather it was a great evening. Well done to the Toy Industries of Europe team for organising the event – Catherine Van Reeth and her team have done a great job putting these awards on the map, after Mattel’s Sanjay Luthra first came up with the idea a few years ago.
Looking ahead to next year, for those who traditionally visit the Las Vegas Licensing Expo, you might like to note that the show has changed its dates for next year. Previously scheduled for the middle of May, the show will now take place three weeks later, from 13th-15th June. Apparently parts of the Mandalay Bay venue are about to undergo renovation, which is due to finish just a couple of weeks before the show’s original date – which understandably made the show organisers a little nervous. For UK visitors, moving the event back helps to avoid the show clashing with the May half-term week, which I am sure will be welcomed by some attendees. So, all things considered, I think the majority of exhibitors and visitors will be perfectly happy with the decision.
Finally, we picked up a story earlier this week suggesting that the Hong Kong government had bought up a huge number of plane tickets, which it is allegedly planning to give away to encourage international visitors to return. However, before you all head off to join a queue at the Hong Kong embassy in the hope of getting one of the golden tickets (Phil & Holly are already there), a few caveats may apply: as yet there is no official word on how the tickets may be allocated, which global regions they apply to (China & Asia or further afield) or what percentage will be given to tourists versus business visitors. Nevertheless, it’s been our top-read story of the week online, so there is clearly still considerable interest within the toy community in what is happening in Hong Kong, despite what some people (mainly American, it has to be said) are suggesting on social media.
I gather that at least one prominent US toy executive has flown to Hong Kong this week, so it will be interesting to see what he finds. I am being told that some showrooms will definitely be open in January, but perhaps for a shorter period (one week?) and that some of the showroom buildings are now like ghost towns, as many former occupants have not renewed their leases. One major concern is what happens if – or more likely, when – Covid rates increase, now that the territory has opened up slightly; will quarantine restrictions be hastily reintroduced, or will the government accept a higher number of cases as part of the trade off with making Hong Kong accessible to the outside world again?
In addition to the quarantine uncertainty, there is a more fundamental question for most suppliers; how many major buyers will be heading to Hong Kong in January? I appreciate it’s a bit of a Catch-22 situation (do they know if it will be worth going until they know who they will be able to see there?), but I’d be interested to hear from any buyers who have made their mind up either way – happy to keep any responses off the record, of course.
I also managed to catch up with Jonathan Busher this week, to hear more about the ongoing negotiations surrounding a permanent toy showroom building in El Segundo. It’s a fascinating potential development, but it needs far more space to explain properly (and diplomatically) than I could afford it within the Blog – so expect a long-read article in the November issue of Toy World, which I hope will give a balanced view of what may be happening in LA and who it might appeal to. Interestingly, the conversation reinforced a few perceptions, but also raised some intriguing questions about whether jumping into LA with both feet is actually right for everyone – and indeed, whether the main US players even want this to happen (spoiler alert – some really don’t).
