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.

At 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.

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 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.

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, 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.

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.

Property Progression:

The Match Attax property has moved up 56 places in the property rankings in September versus the prior month. With much of the focus in September on World Cup sticker sales, it may have slipped under the radar that the Match Attax cards from Top Trumps are also performing very well. The Match Attax 22-23 Mega Tin is the top item for the property, featuring star players from the UEFA Champions League, UEFA Europa League and the UEFA Europa Conference League.

Fastest Growing Licences in Toys

Jurassic Park/World remains at #1 with Spidey & His Amazing Friends in the second spot.

The top growth licence in the UK toy market YTD September 2022 is Jurassic Park/World. Standard Building Sets and Action Figures both make up around a third of the overall value of the property, although there are significant sales in a broad selection of other categories, including Preschool Toys, Plush and Science Toys. There are several other movierelated licences in the top 10 alongside Jurassic Park/World with Star Wars, Batman and Disney Encanto also appearing as top growing properties for 2022.

Spidey & His Amazing Friends is the second top performer, with strong performances in both Building Sets and PS Figures & Playsets. The show is also now appearing on CBeebies in the UK too, which may well boost toy sales further. National Soccer Club and World International Soccer are also appearing amongst the top gaining licences, with both the Premier League and World Cup Stickers increasing sales. There were two Premier League sticker items and one World Cup sticker item in the top 10 items list for the total market for the month of September.