NPD Insight

Squeezes and squishes

As the toy market heads into the all-important Q4 selling period, Melissa examines current sales trends and look ahead to how these are likely to develop for the rest of 2022.

As we reach the start of the peak season, the UK toy market is currently down -4% in value and -10% in units for Year-To-Date August 2022 versus the same period a year ago. However, the last couple of months have seen sales increase, with July value up +10% and August +1%. The first growth months of the year were helped by the good weather finally driving Outdoor toy sales.

With the cost of living increasing, the macroeconomic challenges and their impact on the toy market has much been discussed in the last few weeks. In July, the NPD Group’s Future of Toys service asked consumers across the EU5 countries (UK, France, Germany, Italy & Spain) if they thought they would spend more, less or the same on toys in the next six months. The UK was the only country where more people said they would spend less, while the other countries were more optimistic. The picture isn’t entirely straightforward though; while the UK toy market value may be down YTD, there are some areas that continue to thrive in challenging times.

Licences continue to outperform the rest of the toy market - as they have for the last three years -and now account for 29% of toy sales, up from 23% inthe same period in 2019. Movies and cinema re-openings helped, and Jurassic World has become the fastest growing license in the toy market so far this year. Disney Encanto is the largest new licence, following the film release at the end of 2021 and the subsequent streaming. Other film licences that have seen strong performances since the start of the year are Batman and Sonic the Hedgehog. Streaming content has also helped toy sales, noticeably the mix of Star Wars and Marvel content, with the properties up +15% and +13% as well as being the No.1 and No.2 properties respectively. Stranger Things lines have also grown YTD, while Video Game properties have also performed well, especially Minecraft and Among Us.

New launches in the last year now account for 28% of the market YTD, up +5% on new launches in 2021, with the Pre-school area having some particularly strong new entrants. Spidey and His Amazing Friends and Bluey have been growing throughout the year, while the recent release of Gabby’s Dollhouse products in the UK is on course to repeat the brand’s huge US success. Also in Pre-school, Toniebox is the fastest growing brand, leading the Pre-school Talking and Sound category with a range of licensed and non-licensed figures. The Weebles relaunch has also added sales to the Pre-school category.

Elsewhere, Squishmallows is the fastest growing brand across the total Toy Market YTD, driving Traditional Plush category growth along with Ty Squish-a-Boos. Squishmallows has the benefit of appealing to both kids and adult collectors, as well as benefiting from the sensory trends in the market. For the older age ranges, Lego Creator Expert has grown +46%, helped by a strong performance from the Botanical lines. Collectibles is also growing this year, up +8% with 5 Surprise, Funko Pop and Real Littles all showing double digit growth and the Magic Mixies brand expanding into collectibles. The new series of Premier League Adrenalyn cards has also had a strong start, ahead of the Qatar World Cup which is likely to drive Panini’s market share in Q4.

On the retailer side, Toy Specialists have performed exceptionally well this year, up +32% to August and accounting for 29% of the market, according to The NPD Group’s new Consumer 360 service. While Q1 growth was against a lockdown the previous year, Specialist sales continued to grow into Q2 and for July and August, with consumers appreciating the broad mix of product and in store expertise. Overall, in-store toy sales up +9%, while online sales have fallen to 45% of all sales.

Looking ahead to the remaining months, while there may be some challenges, there will also be opportunities for innovative and agile businesses. Games is always a strong category in the last months of the year, with potential squeeze on external entertainment spend - families and kidults may fondly recall the fun of Games during the lockdown period. Some higher price points will continue to do well for Christmas as always, as long the products provide play value, and licences look set to continue to drive toy sales. As ever in the toy market, it seems that challenges and opportunities often go hand in hand.

Item Progression:

With an average selling price of £183, Lego’s Super Heroes Marvel Sanctum Santorum is an early winner among the high-priced items for the second half the year. Marvel has performed strongly this year and is the number two bestselling property across the total toy market YTD, up +13%. Building Sets is the largest supercategory for the property, accounting for 41% of sales, while Action Figures enjoys a 35% share. Infant/Toddler and Pre-school is the third largest category, followed by Games and Puzzles, with all categories in growth vs. 2021

Top 10 Fastest Growing Subclasses - Total Toys

Ranked by value gained

The fastest growing category for the UK toy market this year continues to be Traditional Plush, where Squishmallow is the star performer. Squishmallow is the fastest growing property across total toys Year-To- Date. However, both Ty and Rainbocorns are also strong performers in the category, and licensed Pokémon, Peppa Pig and Bluey plush is also driving growth. While Pokémon also dominates Strategic Trading Card Games with two thirds of all sales and continuing to grow, the Match Attax Football range is also growing and gaining ground.

In Action Figure Collectibles, Funko Pop! is the top growing property, but the last few months have also seen SuperThings new range deliver growth, as well as video game properties such as Minecraft and Among Us. Special Feature/Interactive Plush growth is coming from a range of properties, with CoComelon, Magic Mixies, Fur Real Pets Alive and Little Live all up on last year. Standard Building Sets growth is driven by licences - especially Star Wars, Marvel Universe, DC Universe and Jurassic Park - while Star Wars and Marvel are driving Action Figures Role Play & Dress Up. Miscellaneous toys growth is due to 5 Surprise Mini Brands, while Fashion Role Play & Dress Up growth is due to Purse Pets and Fab Lab.