from the publisher

For those of us in the toy community, there is a lot to be positive about right now. Demand for toys continues to remain high: toy sales across the globe have grown rapidly in Q1, while sales numbers since stores re-opened here in the UK have been extremely encouraging. According to NPD, the first week of trading was little short of extraordinary – value growth of +6% and volume growth of a whopping +40%.

The second week’s trading inevitably ‘coursecorrected’, with kids back at school and a large chunk of saved up pocket money and Christmas/ birthday money spent the previous week. However, if you benchmark the second week’s numbers against 2019, value and volume were + 2% and + 1%. Essentially, the UK toy market was back to where it was two years ago, when the world was normal. By any metric, that’s hugely reassuring.

The return of physical retailing has certainly helped stores to start moving through residual stock left over from Christmas, while those categories which needed in-store shoppers to truly thrive – fidget toys, collectibles and plush among others – have picked up nicely. As stock starts to turn, that should help sales reps and agents to get appointments with retailers, who will soon need to start placing new orders for summer and beyond. Slowly but surely, the industry’s natural cycle is returning.

But….

Yes, there is always a but. Right now, the proverbial fly in the ointment comes in the form of a global logistics nightmare, which could potentially have a significant impact on product availability and pricing over the coming months. There are many pressures on the global supply chain right now – a reported shortage of workers in China, raw material and component shortages and price increases – but it is the shipping arena in which some of the biggest challenges lie. Ongoing capacity issues have seen prices surge again in recent weeks.

Extra costs can be amortized slightly easier when a container is full of thousands of small, low-priced SKUs – however, it’s much harder for suppliers with large, high cube items. I have heard of some ranges

that have been delayed, in the hope that container rates will fall, making it more viable to bring them in. However, it is looking increasingly likely that some ranges may not make it to the UK at all this year, while some are even predicting that higher shipping costs may be with us way beyond the end of this year.

In other cases, some toy companies physically can’t keep up with demand for their products, while simultaneously seeing prices increase almost in real time. One MD was trying to explain what he’d had to ask his salesforce to relay to customers – from what I could gather, the message was essentially: “Get your orders in now for product we can’t supply, in case the product you can’t have is even more expensive next week.” That’s a bold pitch…. the thing is, it’s also frighteningly accurate.

So, what is the upshot of all this disruption? The obvious conclusion to draw is that there is likely to be a shortage of product as the year draws on - looking towards Q4, stock is likely to be king. We are very much in ‘better class of problem’ territory, without a doubt. The toy industry is flying across the globe – families have turned to toys to help them through the events of the past year, and we’re reaping the benefits of parents witnessing first-hand just how valuable toys and play are to their children, both physically and emotionally.

However, if I were a retailer – major or independent, specialist or multi-channel – I think I would be looking to firm up my festive orders sooner rather than later this year. When it comes to freshening up your product selection, there is plenty of inspiration for you in this edition – there are in-depth product features on the Arts & Crafts, Wheeled Toys and Infant Toys categories. We also have our first-ever special feature on the burgeoning Kidult category, with some fascinating input from a selection of leading suppliers who have ranges aimed at an older demographic, as well as from a number of specialist retailers who are already enjoying success in this area.

Hopefully, the strong demand for toys will continue as we enter the second half of the year – it has been an extremely positive start to the year, but half of the race is still to be run.