Talking Shop

Winter is coming

This month, Sam Giltrow and Suzie Sparkes chat to a selection of indie retailers to find out their current best sellers and how both they and their customers are getting ready for the festive season.

Lisa Clay - Armadillo Toys, Leeds

The business is doing well currently, and we are very happy with everything. Quite often, we see slow trading over the summer, with lots of families going away, but we have been exceptionally busy during the school holidays, and I think we’ve probably had our best summer ever.

We’ve also introduced a new initiative recently - making up gift bags for different age groups, which have been really popular. We wrap the toys up and put them in a bag with a card on showing what’s inside, so the customer can see what presents they’re buying, but it’s all ready to gift. The bags have been really well received, it’s something different that makes life easy for the customer.

Our top performing ranges are Ty plush, Schleich figurines and anything from Orchard Toys. We don’t invest heavily in licensed merchandise, but a few lines which sell well include Dobble, with Harry Potter and L.O.L. Surprise!, and Top Trumps, which features a number of on-trend licences. These have been very popular with customers looking for travel games.

The average basket spend is still encouraging and we haven’t noticed any impact yet from the current cost-of-living crisis. I thought this would be much more noticeable and was quite concerned, so I’m rather surprised. We are in quite an affluent area, but even in an affluent area, if your bills increase you may have to start living to within your means. But we are not seeing this take effect just yet.

I am not too worried about the rise in energy costs as I managed to fix my rate for four years back in May. I was shocked then at the price, because it had more than doubled, but now I am very happy that I took the decision to lock it in – in hindsight, it’s a good rate. I have seen other businesses discussing their bills which look incredible and very scary, so I count myself lucky. Fortunately, we don’t have excessive energy costs, as we just have the lights and a few other bits running. But times are tough, and we are waiting to see what the new Prime Minister, Liz Truss, decides to do to support businesses that desperately need more help.

It's hard to predict what will happen in the run up to Christmas, and whether customers will still be spending the usual amount, but the current signs are that it will be okay. I think people will still want to treat their children and we just have to ensure we have plenty of choice for them.

I have planned ahead though by buying heavily when there have been reductions and promotions; I bought a lot of stock over the summer that I will be using during the winter. I’ve taken advantage of any offers or deals I’ve come across throughout the year, so that we can make extra margin or, more importantly, continue to offer customers a good price. Even when we have had price increases and we have been forced to pass these on to the customer, we have ensured that other options remain at affordable price points. If you have the capacity to store the stock and pay for it, then I think it’s a shrewd move – although our stockroom is now at Christmas levels already. This festive season, we plan to offer a Christmas version of the gift bags we recently introduced, which will be ready to pick up and go. Initiatives like this - a point of difference and making something special for the customer - is just the kind of thing you can do as an independent to make your shop stand out.

Overall, I am optimistic about Q4, but you never know what’s round the corner. However, with our customers currently spending more than ever, we are happy with how things are going.

Fidelis Rice - Totally Toys, Castlebar, Co. Mayo

We have been selling a lot of L.O.L. Surprise!, Lego and outdoor toys over the summer, and trading overall has been very positive. In particular, Smoby slides and playhouses have been popular. We usually take a container of Smoby product to sell throughout the year; it’s not stocked in some of the bigger retailers locally, and that gives us a point of difference. The Smoby range has good quality products which don’t just sell in the summer months - the kitchens and supermarkets also sell well at Christmas.

We stock a good range of character licensed toys, but what sells in Ireland is often different to the UK. For instance, Bluey hasn’t really taken off here – rather than content from the BBC and Netflix being guaranteed winners, we find more of our customers are fans of shows on Sky. CoComelon is an exception though: having started on YouTube, it is really established as a brand now, and we carry a range of product from Bandai and Clementoni. Little Live Pets, from Moose Toys, is a strong seller for us and so is Character’s Heroes of Goo Jit Zu range.

We carry a selection of farm toys which are very popular – we stock a wide range from Bruder. These make up our bread-and-butter lines, along with other steady sellers like Lego and anything L.O.L. Surprise!

Here in Ireland, since Brexit, retail pricing is quite high. New tariffs and charges mean it can be challenging to make a decent margin, and when we compare our ranges to the bigger retailers, there’s a fair gap. We found that sales held up very well through the summer, but I expect the effects of inflation and the price of energy to hit us in the next couple of months. It really is hard to predict what will happen.

I’m certain that our Christmas club will be very important this year, so our customers can budget and spread out their costs. Although there’s uncertainty around the corner, even in the worst of times, Christmas is usually okay and people will still spend, they will perhaps just be a bit more careful this time round.

The next two or three months will be telling; it depends what the government will do to try and counteract these challenges, plus the two interest rate increases we’ve had in the last couple of months will start to have an effect. The annual budget is coming up and they have promised there will be some sort of energy cap or rebate to help people. A scheme was put in place to give everyone €200 a few months ago, and it’s rumoured that they will do something similar again with a slightly increased amount, which might help to counteract the inflation problem. However, I suspect the uncertainty in people’s minds will make them a little more cautious than usual about what they spend.

To try and keep our offering attractively priced, we buy a good volume of clearance lines, and this is a key part of our business. But there’s only so much clearance stock we can buy, as we have to balance this with the high-profile ranges the customers ask for. It’s a difficult balance between sought-after toys with tight margins and stock that actually makes us some profit. With key brands, the margin is dropping year on year. The larger retailers seem to have previous warning of price rises and are able to buy forward to ensure stock and protect their margins, and the indies are then left with slim pickings – it’s a constant battle.

This Christmas, I expect customers to buy less bigticket items, opting for a few smaller items instead. A few years ago, big budget animated toys were hugely popular, but lines like that aren’t really working in the current climate. Some kids will still set their hearts on this sort of thing though, but I expect customers who want such items will be looking online, so they can hunt around for the best price.

We recently became a Toymaster member and while we were already dealing with many of the suppliers, opening new accounts has been made a much simpler process. We also get extended credit, which will be helpful for Christmas when we need to commit to a large amount of stock.

Emma Dadswell - Toys N Tuck, Southend

We’ve had a really good, busy summer: as it has been our 30th anniversary this year, we’ve had lots of activities going on. Despite the fact that the weather has been so good this year, we didn’t need to buy in any extra pools or summer products, as we had plenty of stock left over from last year.

Takings were up on last summer, and overall, average spend was a bit higher. Lego and Funko always sell well, and Squishmallows is still having a great time. Children seem to be getting a bit more pocket money and are often making purchasing decisions themselves.

We’ve seen fantastic sales from Gabby’s Dollhouse from Spin Master, which launched in July; we decided to stock the whole range, which includes an £80 house. We would not expect to sell items at this kind of price point until Christmas, but we initially ordered six and sold them all in the first week. The brand launched last year in the US and performed exceptionally well there over the holiday season, so there’s been a bit of a buzz about it arriving in the UK. I have placed additional orders already, in case there is going to be stock allocation.

Another line that has been selling fantastically well is the Pet Simulator X range from Click Distribution, which is a sub game of Minecraft. We didn’t really understand what it was it at first, but kids love it, and it has been hugely popular.

Pre-school and boys ranges are holding up well and, although it feels like there is less newness in girls’ products, there are notable exceptions, such as Moose’s Magic Mixies. Little Live Pets and Real Littles are very strong too, with new introductions that have kept the collections fresh.

Hot Wheels is still a winner, so we are careful to maintain good stock levels; we have sold as many cars already this year as we did for the whole of 2021. As well as children spending their pocket money, we’re getting a lot of adult collectors who will buy a box or maybe 20 cars in one go, which we’re happy to see.

We are starting to bring in stock for the Christmas period now and its beginning to get quite congested in the stockroom. I’m pretty sure Gabby’s DollHouse will be one of our bestsellers this year, as well as Magic Mixies; I’m expecting the Mixlings' Magic Castle to sell well at the slightly higher price point. Despite the current situation, most families will make sure presents for kids are the last thing to be affected. This makes the toy trade a resilient industry; I suspect it’s inevitable that we will feel the effects of a spending squeeze at some point, but we will be the last to do so.

Our Christmas Club is proving extra popular given the current economic climate. Last year we had around 280 people signed up and this year I’m expecting that to tip over 300. The average spend is in the region of £200 and most customers start saving in September. It’s a lot of work for us and can get a bit hectic, but it’s an important way of maintaining customer loyalty; they would rather shop with us knowing they are going to get the toys their children want, without having to splurge the money all in one go.

We had LED lights put in two years which are energy efficient and should help with our bills, thank goodness. We carry a good selection of cheaper items, which is what our customers want right now. We only stock more expensive lines if we are certain they are going to sell. Most of the Christmas gifts bought here are under the £40 mark.

Some of our orders made over the summer meant we got a price hold for later in the year, which will hopefully give us a little bit of extra margin. Selections have never been more important; it’s vital to make sure the products we select are going to sell through.

I am optimistic for the festive season. As I said earlier, spend on kids tends to get hit last, so I think we’ll still have a strong Christmas this year. People will be looking for different ways to manage and our savings club means we are an attractive option, as well as having the right offers and price points. In the New Year, the kids will come in to decide how to use the spending money they got for Christmas, which should keep sales going for a bit longer before the inevitable lull, which we are prepared for. Then bring on 2023!

indie viewpoint

Save your energy

Lots has happened since our last article, as we sit here in candlelight, trying to save on our energy bills - particularly the sad lead up to the Queen’s funeral which has deeply affected the nation. As a mark of respect, we made the decision early to close all of our stores for the day. It is a reminder that there are more important things in the world than selling toys.

Looking back on trade over the last month, as the kids have gone back to school, we have been pleased with our sales figures. The early signs are that this year’s Lego Advent Calendars and other seasonal items have already got off to a good start. It is noticeable that people are starting to shop earlier than ever. This is understandable, as they try to navigate the cost of living crisis, although so far we are seeing our average basket spend increase on last year. However, the pressure on budgets is only going to intensify in the coming months as winter bites - everyone will be looking for value, and it will be important to have attractive offers in store.

I know we say this every year, but September has arrived with more stock than ever hitting our back doors. Price increases from most suppliers have occurred in the last few months, so we timed our orders to beat them - and have taken stock in earlier. This has put a bit of pressure on our warehouses, but we expect our intake to slow in October, as the deluge of orders eases up. Just this week, we have had the 57 pallets in we were expecting, plus lots more that were not booked in.

There are some winners out there already; Gabby’s Dollhouse is selling very well, including the large playset. The new football season has seen sales of Adrenalyn Trading cards and Match Attax really take off, and the World Cup Stickers are already in demand. A few of the new Lego lines have sold well; customers seem very impressed with the new Lego Speed Champions 007 Aston Martin DB5, which appeals to a wide audience. Sonic continues to sell well, and the latest series of Mini Boos from Ty has been popular. Stock of the new Fashion Show launch from L.O.L Surprise! has just arrived, so we will be keeping an eye on that.

As a business, we have been reviewing our power consumption. We put in LED lights as standard a few years ago and are very glad we did. We have been doing daily meter readings to assess consumption by store, and to see what is being used, and have visited each store to work out where we can make savings. A few of our stores have their contracts up for renewal and are being quoted prices up to six times the previous rate. We are taking steps like making sure stockroom and office lights are switched off when not in use, and we are reducing lighting at quiet times in the stores. As our stores are located in malls, we are being hit with hefty increases in the service charge for the increased costs of powering them, a double blow along with our own costs going up. But, as a business we have always been quite nimble and reactive to things - situations like this show that we need to be.

We will be launching the Toymaster Christmas Catalogue in our stores shortly, which is a big part of our marketing for the final quarter. There are some great deals in it, and it really helps get the message across to customers that we are an ideal option for their Christmas shopping. With decent footfall finally returning after three years of disruption, we are planning a series of events in stores over the October Half term to really help drive customers and hopefully sales.