NPD Insight
What’s in store for Q4? Rory examines how current consumer challenges are affecting toy market trends and looks ahead to how Q4 sales might be impacted.
A
t the time of writing (mid-October) the UK toy market is currently down -5% in value vs. the same period in 2021, and the general opinion is that Q4 will be a challenging period. The month of September was down -12% in value and -10% in volume; some tough trends for the final month before we move into peak season. We know there are currently a lot of issues around consumer spending in the UK which could be impacting the toy market, but how do we shape up against other countries around the world? We can use NPD’s global toy data to compare to the rest of Europe and have a look at the US, a country we so often compare ourselves to.
size of the US market is a major factor contributing to those trends. The US toy market is twice as big in value as the combined EU7 and it is contributing 94% of the growth for the combined G12. The US toy market is also up +45% vs. 2019, ahead of any European country, so what’s driving this success? Before looking at market trends, it is worth noting that the US government has given around $1.8 trillion to families since the start of the pandemic to boost the economy, which has obviously helped. One area which has performed well in the US is spend by adults without kids in the household (kidults) – this sector has grown four times faster than those with kids. Other data points seem to reinforce this trend, with growth coming from males, as well as the 18-24 age group and households with higher incomes.
NPD Retail Tracking data covers 12 markets around the world and, collectively, these countries are up +2% vs. 2021 so far, and moreover up +31% vs. the same period in 2019. On the face of it, the G12 are in a relatively healthy state. If we look a little closer at individual country performances though, the overall
Looking at the top gaining properties in the US, there are similarities with the UK. Squishmallows and Pokémon are the top two performers, and other properties doing well include Jurassic Park/World,
Some Kind of New Normal The UK is below the EU average for now YoY Change
3%
7%
USA
45%
3%
Italy
8%
2%
Netherlands
0%
France
-1%
UK
-5%
Germany
-5% -7%
2X size of EU7
The UK is below the EU average for now
5%
Spain
YoY Change
Italy Netherlands
16%
France
Germany
94% of G12 gains ‘22 vs. ‘19
7%
5%
USA
UK
Belgium
US
35% Some Kind of New Normal
8%
2%
35%
0%
5%
-1%
-5%
5%
11%
16%
-5%
Belgium
3%
45%
3%
in 2022
US
2X size of EU7
94% of G12 gains in 2022
11%
-7%
Source: The NPD Group | Retail Tracking Service Projected | G12 $ Sales | YTD w37 22 Document classification: Client/Third Party Confidential
The NPD Group, L.P. | Proprietary and confidential
1
Source: The NPD Group | Retail Tracking Service Projected | G12 $ Sales | YTD w37 22 Document classification: Client/Third Party Confidential
The NPD Group, L.P. | Proprietary and confidential
Toy World 26
Marvel and Funko Pop! In the US toy market, sports licences make up nearly 5% of the overall market, double the share of the UK. Could this be an area that will increase here with the winter World Cup? Looking around Europe, there are mixed results in terms of trends. We can see the countries that didn’t perform quite so well during the pandemic are now having a better time, with Spain growing by +7% and Italy +2%. The UK and Germany, the two top performing markets during the pandemic, are currently both down -5% vs. the same period in 2021. The UK is below the EU average, but some countries are faring better than others. For September, the trend was behind the YTD trend for all major European countries. As already mentioned, Spain and Italy are the best performing European markets and Spain is the only one to see growth in September of +1%, with Italy declining by -1%. The trends in France and Germany are closer to what we saw in the UK, with Germany declining by -6% and France by -9%. The data shows It’s been a tough month for all countries, but that the UK toy market has performed worse than the EU5, with a decline twice as fast as Germany. Looking ahead, one thing that might help the UK in Q4 is that we performed relatively poorly in Q4 last year compared to other countries. The US, for example, will be comparing to a +9% trend in Q4 last year and Spain to a +7% trend. The UK was the second worst performer in Q4 last year with -5% trend vs. 2020. That could help our market trends; the economic challenges will be impacting all countries, so the ones that are up against a strong performance from last year could see some very challenging weeks ahead.
‘22 vs. ‘19
Spain
Rory Partis
Director UK Toys & EuroToys NPD
1
I think we can safely say that Q4 2022 will see some big challenges for the toy market across all countries and the UK is no exception. The only constant for all countries is that Christmas is definitely coming.
