Circana - Insight

Twas the weeks before Christmas…

Rory looks at whether the sluggish start to the festive season should be a cause for alarm or whether we should be hopeful that consumers are looking to spend late and give the market a bumper December.

As we approach the most important trading weeks of the year, the UK toy market is -5% in value according to YTD October 2023 data. However, it is -10% for the first five weeks of the peak season. Obviously, we don’t want the trend to be negative at the most important time of the year. There are a number of factors to consider when looking at the current trends, with the cost of living continuing to impact toy trends, although the story can often be quite different when you delve below the surface. For the first five weeks of peak season, although the value trend is -10% it is also worth noting that the volume trend is -17%. This equates to nearly 4m less toys bought over these five weeks, and it’s nearly 8m less if we compare to the same period in 2020. (This was when we returned to lockdown in November though; there was a lot of early Christmas shopping with so much uncertainty around Covid restrictions in December). There are a couple of supercategories in growth, namely Plush and Youth Electronics, but all others are in decline. Two supercategories are impacting this decline the most: Infant/Toddler & Pre-school Toys, and Dolls - these two supercategories make up over 40% of the overall decline.

However, there is still growth within these categories; Barbie continues to perform well following the movie release in July, while Paw Patrol is at No.1 in Infant/ Toddler & Pre-school Toys after the movie hit screens at the start of October. The volume decline has been heavily impacted by the fact the World Cup was in winter in 2022, so sticker sales were extremely strong at this time last year. The World Soccer property is down -22% in value but -56% in volume versus the five weeks of 2022, and that is having an impact on overall trends.

Thankfully, there are some bright spots, including the Plush category, which continues to perform well: it has grown +7% in value and +6% in volume compared to this period last year. Squishmallows remains the key growth property with an increase of +33% adding over £1m versus last year. This growth is largely from the key Jazwares lines, but a larger share of overall value is coming from licensed items, with licences making up around 20% of overall value in the start of peak season. In addition to the core Plush range, Monopoly Squishmallows in Games, Squishmallows stickers from Panini and Squishmallows Puzzles from Ravensburger are all selling well.

Another area of growth is Youth Electronics, which is up +1% for the first five weeks of peak season, well ahead of the overall market trend. The Kidi range from VTech is the top property here, up +2%, while the top new property is Bitzee from Spin Master. This new digital pet item launched in July in the UK. After a strong start, it is the No.1 item in Youth Electronics for the peak season period so far. The average RRP on Bitzee is £31.35 - a great price point to perform well in December, the item has already been featuring regularly in the top 10 items in the total market in recent weeks.

There is no getting away from the fact that the start to peak season has not been what we would have wanted, but we can look ahead to December with a degree of optimism. Last year, Q4 was flat, and this was driven by a +2% trend in December as consumers left their toy shopping late. There is an argument that this was a return to normal after a couple of years where we got used to earlier shopping due to Covid. Expectations are that this year, sales will be late again, and we could see a bumper week 51 with a full week of shopping leading up to Christmas Day.

With a fifth of all market value still to come in December, this month’s trading can make all the difference to the year end results. Based on a recent survey carried out by Circana, we found out that 43% of shoppers don’t even start their Christmas shopping until December. The same survey revealed that around two thirds of consumers plan to spend the same or more on Christmas this year. We will of course be keeping a close eye on weekly trends at Circana during this all-important time.

Property Progression:

The Magic Mixies property from Moose Toys has seen a jump of 28 places in the top property rankings for October 2023 versus September 2023. This rise has been driven by a large increase in value of the Magic Mixies Magic Genie Lamp 8" Asst, which had a value of £434k in October 2023 compared to £21k in September. It would also appear that this item has been heavily promoted, as the average price in October is £29.87 compared to just over £51 in the prior month. There are strong sales for other items in the collection too, with the Magic Mixies Potions Kit, launched in September this year, being the second top performing Magic Mixies item in October.

Fastest Growing Licences

Even though the UK toy market in 2023 is in decline by -5%, the licensed portion continues to perform well. It currently accounts for 32% of overall sales, compared to 30% at the same stage last year. Star Wars is the pest performing licence in the market as well as being the largest in value size. Star Wars value is around 80% in Building Sets in 2023, but some of the strongest growth is coming from other subclasses with Action Role Play and Traditional Plush being the two top performers.

Disney All Other is the second top performing licence with several items helping growth here. The top items span a number of subclasses and manufacturers with the most successful item being the Disney Up House from The Lego Group, followed by 5 Surprise Mini Brands Disney Store Edition Mystery Pack from Zuru and the Squishmallows Disney Plush 8" Asst from Jazwares. The Disney Lorcana Booster Pack from Ravensburger also features in the list of top items, adding Strategic Trading Cards as a subclass for the overall licence.

Gabby’s Dollhouse is the No.3 licence for added value and has been one of the top growth licences, particularly over the last couple of months, with items regularly featuring in the top sellers. Pre-school Figures & Playsets is the largest subclass for this licence, making up nearly two thirds of value in 2023, with Building Sets, Large Dolls and Traditional Plush being the other major subclasses. The Gabby's Dollhouse Purrfect Playset from Spin Master is the No.1 item for the property, with around £1.5m in value so far in 2023.