Circana - Insight

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A shift in consumer trends in the toy market over the last few years has seen the potential size of the market reducing, as pressures such as reduced birthrate, inflation and the cost of living have combined to have an impact on consumer spending on kids. Emilie looks at how these trends break down.

During the first half of the year (YTD June), UK toy market sales were down -4% in value, reflecting a challenging start to the year. However, the overall performance improved in both May and June, with unit sales flat, boosted by sales of football cards and stickers related to the UEFA Euro 2024 Tournament, plus the strong performance of licensing overall.

The market has seen a shift in consumer trends over the last few years. With fewer children being born, the potential size of the core target market is shrinking, while spending on kids has reduced due to inflation and the cost of living pressures which consumers have faced in the last couple of years. On average, spending per child under 11 years old was £308 for the UK last year, down -7% YOY – the equivalent of -£22 less per child compared to the previous year. Multiplied by the number of children, that generated a reduction of -£202 million.

Spending for younger kids, less than five years old, experienced the greatest impact across both genders. In addition to the declining birth rate, the second-hand market may also have impacted pre-schoolers’ new toy sales. Circana’s Second-Hand survey (carried out in France) discovered that Infant/Toddler/Pre-school was the third largest category which was bought second-hand.

For older children, Girls’ Toys spending decreased faster than Boys for 6-11 years (-11% versus -6% versus 2021 respectively). This is a concern, as this spend may be moving away from the toy industry. Girls are likely to transfer spending outside of toys earlier than boys: to fashion, beauty products, music and video games. Sites like YouTube, TikTok and Roblox seem particularly popular; according to figures from whatsthebigdata.com, 60% of Roblox users are under 16 years old and 39% of users were female. Video games accounted for 12% of licensed toys sales in YTD June 2024 and Aphmau, Adopt Me! and Animal Crossing were all part of the top 15 gaining licences in total toys this year compared to last year.

Overall, Girls Toys now account for 43% of the total toy market value sales versus 46% in 2021, having decreased -17% versus 2021, driving the market decline.The only toy supercategory growing for Girls aged 6-11 years is Plush, now accounting for more than 20% of the spend. This is the second largest category after Dolls and it saw its share of girls spend doubling versus 2021. Dolls and Art & Craft were the other two categories over-indexing for Girls 6-11 years old.

Plush has been the top-gaining supercategory in the last few years, generating an additional +£23m since 2021. Its growth was driven by the success of soft toy collectibles such as Squishmallows. In the last six months, newness has been driving the sales increase: Zuru Snackles and Hasbro Furby are in the top five gaining properties in total toys, YTD June 24 compared to last year. For the first half of the year, the top ten best-selling assortments in the total UK toy market were plush, and they generated 19% of total market sales overall.

Girls have also been spending more on “traditionally boys” categories: a quarter of the spend on Building Sets can be allocated to girls, more than 20% for Action Figures and a third of Games & Puzzles and Outdoor Toys in the UK. The Collectibles trend, with sales up +21% versus 2021, and top properties such as Star Wars and Marvel releasing movies with strong female lead characters in the last few years, have also tapped into girls’ pocket money: as a result, girls’ spend on Star Wars sales and Marvel Universe properties went up +4pt and +7pt respectively compared to 2021. Almost a quarter of the sales of Pokémon is from girls - and Disney Lorcana may have introduced even more of them to the Trading Cards segment.

While much focus has been put on Kidults - toy purchases for consumers aged over 12 years - the industry shouldn’t neglect the importance of its younger consumers. Today’s kids will be the adult buyers of tomorrow, and getting them engaged in the category early is key to driving sales in the future. A sense of nostalgia and tapping into the franchises we loved when we were kids drive a huge part of today’s Kidult appeal for Star Wars, Jurassic World or Harry Potter. For this first half of the year, TMNT was the No.3 gaining licence YTD in June 2024, and Lilo & Stitch is No.5, showing the strong appeal of reviving beloved properties. Some of the most toyetic movies coming in the second half of the year are tapping into this trend, such as Despicable Me 4, Mufasa, Moana 2 and Sonic 3, so the toy market should benefit from further licencing successes this Christmas.

Licence Progression:

Lion King licensed sales jumped 81 ranks between May and June, even though the Mufasa movie won’t be released until December. New Building Sets and growth in Pre-school Talking and Sound, as well as Plush, generated the uplift. Despicable Me/Minions also saw a big jump in the licence ranking (+61 rank) with the latest movie released in mid-July and new products introduced in Building Sets, Action Figures & Accessories, Plush and Games & Puzzles.

Fastest Growing Properties:

YTD June 2024, a quarter of the subclasses were in growth compared to last year.

The subclass that had added the most added value in the UK toy market at the half year mark was Standard Building Sets. This was boosted by the success of Lego Icons, especially the Botanical range, focused on key trading periods such as Valentines’ Day and Mother’s Day. Botanicals has also expanded to mid-range price points and younger age groups this year. Licences also contributed to this growth, with top gaining licences Mercedes-Benz, McLaren and Star Wars.

Non-Strategic Trading Cards/Collectibles Stickers was the No.3 gaining subclass, largely boosted by the Euro 2024 Football Tournament and England reaching the final. The UEFA Euro 2024 Sticker Collection Pack from Topps was the No.2 bestselling item in unit sales in the three months to June 2024, generating an additional £1.2m in the toy market in six months and delivering much-needed volume.

Miscellaneous Toys sales were up +6%, thanks to new launches: MGA’s Miniverse and the expansion of Zuru 5 Surprise into mini Books and Sneakers, as well as the new 5 Surprise Mini Brands Master Chef Create Mystery.

Robotic/Interactive Playmates and Special Feature Plush continue to gain from 2023 new launches. These were hot properties last Christmas (especially Bitzee and Furby), and this trend is likely to continue with lots of newness coming for Christmas 2024.