Inflation hits toy market

Toys: all sorts of promotions to stimulate Christmas shopping

2023-12-15 13:56:00

Black Friday, flash sales, low-priced selections: toy retailers are doing their best to stimulate Christmas shopping, which is still suffering from inflation this year.

"Toys are still a safe buy because we're not going to stop giving kids gifts, but we're looking for action: the climate is not euphoric, everyone is just talking about the rising cost of living," said Frederic Tutt, toy market analyst at Circana (formerly NPD).

Although the games and toys market is less affected by inflation than the food sector, it is still lagging behind: in November, sales were down 7% compared to 2022, a gap that should be partially offset in December, a month that generates more than a billion euros in sales.

However, the situation is uneven: supermarkets and online players "are lagging further behind and losing market share, unlike specialized toy chains, which are showing better dynamics," notes Philippe Guidon, co-chairman of the Federation of Specialized Retailers of Children's Toys and Baby Products and CEO of King Jouet.

"At JouéClub, we expect to break even in 2023, which would be an impressive result in a shrinking toy market and in the face of inflationary pressures," says Franck Maté, spokesman for the group, which has 284 stores in France.

As soon as the Christmas catalog came out, the company "went on the attack with more special offers than last year," he notes. "At a time when people have less and less money to spare, given inflation on food - the biggest item of expenditure - we have to stand out and create a dynamic in the store."

This Christmas, Europeans expect an average budget (gifts and/or preparations) of €369, up from €404 in 2022.

And 83% of them say inflation will affect their Christmas shopping, according to a survey of 1,019 people conducted by Toluna Harris Interactive in partnership with the French Federation of e-commerce and distance selling (Fevad).

In terms of trends, there will still be plenty of licensed merchandise and superheroes (Pokemon, Barbie, Pat'Patrouille) under the tree, as well as board games (including those that have remained constant over the years, such as Who's That, Dr. Maboul and Puissance 4) and "story boxes," small audio speakers that play stories and songs.

Not to be forgotten are the interactive companions that have become top sellers in recent weeks, such as "Bitzee," a purple box with a hologram animal that can be fed, groomed and stroked to help it grow; "Cuddly Otter," which soothes babies; and such 1990s throwbacks as virtual animals "Tamagotchi" and "Furby," a plush toy with big ears that talks to children.

At the same time, according to Circana, eco-friendly toys will be a minority on store shelves this year, with just 2.5 percent of products.

Hence the importance of the growing importance of the 'polluter pays' toy collection and reuse scheme launched last January.

By November, "around 5,000 collection points" had been set up in waste collection centers, stores, associations and schools, according to Dominique Mignon, president of EcoMaison, the organization in charge of the scheme, who notes that by 2024, the plan is to "reuse 8,000 tons of toys and collect 40,000 tons."

Inflation is having a negative impact on the toy market. Toy retailers are doing their best to stimulate demand, but this may not be enough to offset the impact of inflation.

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