NPD Insight

2022 in review

This month, Melissa looks back at trading in 2022, as the year ended on a high for many categories in the UK toy market.

2022 was a challenging year for the UK Toy market, finishing the year down -3% in value versus 2021 and -6% in volume. However, the market improved throughout the year, with Q1 the poorest performing quarter, down -10% in value compared to the same period in 2021, when the UK was in a lockdown and toy sales were higher than normal. Q2 performance started improving, although it was impacted by slow Outdoor & Sports Toys sales due to poor weather compared to 2021, with value down -5%. Q3 saw continued improvement, with a modest -1% decline, largely due to the impact of the death of the Queen in September. Q4 was the strongest quarter of the year with value flat, but with December up +2% in value and volume +3%. This was the first time in ten years that Q4 has outperformed the trend set in the first nine months of the year.

After two years of early Christmas shopping driven by Covid, Q4 2022 looks to have returned to a more traditional pattern, with October up +1%, driven by promotions, and November down -4%. December was a stronger month for the trade, although it was very late to pick up, with many consumers waiting until just before Christmas to purchase. This could be due to them looking for value from products and prices, as well as the benefit of having Christmas Eve fall on a Saturday for the first time since 2016. Week 50 represented 5.2% of annual toy sales, while Week 51 - which finished on Christmas Eve - was the largest week of the year with 5.3% of annual sales, up +15% vs. 2021 and +49% vs. 2019. Growth continued into week 52 as well, with the market up +2%. It may have been later than many

within the industry would have ideally liked, but the overall numbers for the season are positive, especially compared to the early part of 2022.

Despite the challenges throughout the year and pressure on consumer spending driven by inflation and cost of living increases, there were still some areas of the UK toy market that performed well. The strongest

performing category for 2022 was Plush, up +29% driven by the phenomenal success of Squishmallows. The Squishmallow 8” Assortment was the No.1 best-selling item in the UK for 2022. In addition, the Plush category also saw strong growth last year from Ty and interactive plush, especially CoComelon, Magic Mixies and Little Live Pets. 2022 also saw Building Sets grow for the second year in a row, with The Lego Group finishing the year as the number one corporate manufacturer in the UK, with the highest share ever seen in the UK toy market at 15.5%. Other growth categories across the year included the Action Figures & Accessories supercategory, driven by Funko Pop and Jurassic World, while Vehicles also grew thanks to Hot Wheels.

Collectibles grew across the market in 2022, with Strategic Trading Cards one of the top growing categories. Pokémon Trading Cards was the key driver for the year, continuing its growth from 2021. In addition, FIFA World Cup Stickers from Panini performed well in Q4, helping to drive volume sales in Q4 and resulting in the World Soccer property growing +38% vs 2021 and the Euro Championship tournament. Other collectibles that grew in 2022 included 5 Surprise from Zuru with Mini Brands, and Real Littles from Moose.

Licences grew for the fourth year in a row, reaching 31% of the UK Toy market. This equated to almost £1 in every £3 spent on toys, with a mixture of movies, streaming and on-demand shows and video games helping to drive the top performers. Most of the growing licences were existing properties, as consumers stuck to tried and trusted ranges and extensions. Star Wars was the top property for the year, followed by Marvel Universe, Barbie and Pokémon. The top new property in the UK was Gabby’s Dollhouse. Despite a December release date for the film, Avatar toys performed well in December and finished the year as the number two best new launch.

Given the continuing macro-economic pressures on consumers due to the cost of living, 2023 may still hold some challenges for the UK toy market. However, consumers will still need to entertain and educate their children, while the trend for kidults to turn to toys for entertainment and collecting remains strong. Even in challenging years, there are always strong products that stand out and will be drivers of the market for the coming year.

Item Progression:

December is always the key month of the year for Games, accounting for 36% of annual Games sales, compared to 21% for total toys. As a result, a number of Games items enter the top sellers for total toys for the month, with games representing 11 out of the top 50 items. Monopoly Classic and Pictionary Air are the best-selling games for December, increasing their ranking to number 4 and number 6 across total toys from November respectively. However, Articulate from Drumond Park saw the greatest leap, not just for Games, but across total toys, moving from number 402 to number 32, despite only having weighted distribution of 66%.

Fastest Growing Licences

Licences accounted for 30.7% of all toy sales in 2022, growing ahead of total toys, up +5% and ahead of 2019 by +24%. The top growing licences were a mix of classics and new offerings. Star Wars was not only the largest licence in the UK, it was also the fastest growing. The property’s strong performance in 2022 was helped by multiple streaming series releases, as well as the introduction of high priced offerings in Building Sets. Following the release of the Jurassic World: Dominion movie over the summer, Jurassic World was the second fastest growing licence in the UK, with sales nearly doubling from 2021. Action Figures was the strongest category for Jurassic World, where it was the number one licence for the year.

The men’s World Cup in Qatar helped the FIFA licence to grow in Q4, primarily driven by Panini stickers. Minecraft also enjoyed a strong year, especially within Building Sets, where it was the number three licence in 2022. Film releases from early 2022 remained strong throughout the year, with Disney Encanto and Batman both growing this year.

Pre- School licences also performed well this year, with Spidey and his Amazing Friends, Bluey and Gabby’s Dollhouse amongst the topgrowing properties. Gabby’s Dollhouse was also the top new launch in 2022. All of these licences are supported by content available on demand, with Pre-School Figures & Playsets a key category.

Collaboration with successful brands including Zuru’s 5 Surprise, Moose Toys’ Real Littles and Jazwares’ Squishmallows helped to drive growth for Disney ahead of the launch of the Disney 100 initiative in 2023.