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Toy market declines in 2013 following drop in sales of 'pocket money' toys

A new study has shown that the size of the toy market declined by 1% to £2.9 billion last year as trade was impacted by a decline in sales of low priced ‘pocket money’ toys.


Toy market declines in 2013 following drop in sales of 'pocket money' toys

According to research by global information company NPD Group, the number of units sold fell by 5% to 364 million.

The study also found that while average toy prices increased from £7.52 in 2012 to £7.92 in 2013, sales of ‘pocket money’ toys priced at £5 and under fell by 12%. With these low cost toys representing almost 45% of all unit sales, the decline had a significant impact on the overall toy market.

According to NPD Group some of the best performing toys in 2013 were in the youth electronics and games and puzzles categories. Furby experienced a 66% increase in sales compared to 2012, and was the best-selling toy of the year. Other strong performers included Barbie, Lego Friends, Playmobil and Ninja Turtles. Popular toys for pre-school aged children included Peppa Pig, Mickey & Friends, Little Tikes and new entrant to the market Doc McStuffins.

Frédérique Tutt, global toy industry analyst with the NPD Group, explained: “In the UK we know that the impulse purchase of toys has been hit hard by the squeeze on consumer spending. In 2012 sales of ‘blind bag’ toys under £5, such as collectible Lego Mini Figures and Moshi Monsters, were a real driving force in the UK, much more so than in other European markets. Last year the industry was unable to keep the momentum and lost out on pocket money sales. So whilst higher value toys performed well, it wasn’t enough to compensate for the high volume/low value items.”

NPD Group said that last year’s toy market performance also highlighted its reliance on licenses as more than a quarter of the business is linked to a character from a TV series, movie or internet licenses such as Moshi Monsters or Angry Birds. In 2013, the absence of a strong blockbuster movie and the lack of leading new entertainment properties amounted to a loss of £44 million in overall licensing revenue compared to 2012.

Tutt added: “The good news is that as the economy improves, the UK toys market is well positioned for a rapid recovery. As it is less reliant on toy sales tied to special occasions, it reacts well when a new toy fad comes along – for instance, a strong movie license or collectibles. As people feel more confident about the economy, they’ll go back to adding these lower priced toys to their weekly supermarket shop, or they’ll pay more visits to their local toy specialist.”

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