Glass half full?
Following a surprisingly positive selling period so far, NPD has been working on a full year 2020 scenario planning figure for the UK toy market. Here, Rory looks at the potential outlook for the rest of the year.
t the time of writing the UK toy market is currently +7% in value YTD vs. the same period in 2019. That is the best performance we have seen at this stage of the year since 2016, when the market was also growing at +7% at this stage and finished with a full year performance of +6% in value. This year has been unprecedented; with the UK going into lockdown in March and only just easing out of some of those measures, the last few months have been turbulent to say the least. But the toy market has performed well in a tough time. Before school closures were announced, the market was -5% in value vs. 2019. Over the lockdown period the market has been +17% in value as parents use toys to help with the challenges of home schooling and keeping children occupied and happy, while good weather has meant Outdoor Toys has amassed nearly £100m in value from mid-March to early June. Recently, NPD has been working on a full year 2020 scenario planning figure for the UK toy market and has calculated three scenarios for year end, ranging from a pessimistic to optimistic outcome. The realistic scenario figure for 2020 is -4%, and this figure has generally been well received across the NPD client base. This means the market is going to be quite different in the second half of the year. So, what is going to change?
If the market is going to finish at -4%, it would mean that the period from now until December will be -8% in value, so a marked contrast from the first half of the year, or at least the last three months. When we consider that more stores will be open, and consumers will generally be out and about more, it does seem strange to be talking about the rest of the year being so different. But the last three months have been anything but normal and this will have an impact on the rest of the year. Spend may be up, with over £50m more being spent on toys post lockdown than the comparable period last year, but volume is significantly down with nearly 6m fewer units being sold. Since lockdown began, the average price is up across every single supercategory. Some of the most notable increases are in the categories that are proving to be popular choices just now; for example, Building Sets has increased from an average price of around £13 last year to over £19 this year. Parents have been looking for items that have play value and can entertain kids for longer. Bigger and more expensive toys are winning over lower priced items that might be deemed to have a shorter shelf life. Impulse purchases are not happening as parents largely shop without children, consequently we have seen a huge change in the collectibles trend during the lockdown period. When schools go back and shops are fully open nationwide, this may change and could impact trends over the next few months. However, parents will potentially be saving for the all-
Pre & Pre post& lockdown value trend post lockdown value trend
Director UK Toys & EuroToys NPD important peak season period.
Outdoor Toys has been one of the big winners during the lockdown period, with £30m more being spent on this category from mid-March to early June versus 2019. This has undeniably been helped by some good weather, but also by parents keen to get kids out into the garden and active. Over the last few years, Outdoor Toys has averaged around £65-70m in value for June and July combined, but only time will tell if that money already been spent this year. If parents have simply bought Outdoor items a little early this year, then this will affect the spend over the traditional summer months and is another factor that could influence market performance in the second half of the year. That said, there is a counter argument that if families cannot go on holidays and even more time is being spent in the garden and on day trips, then Outdoor Toys could still enjoy a strong summer.
ValuePre salesValue UK lockdown toy market post lockdown are +17% &in the post value trend sales in the UK toy market post lockdown are +17% Value sales in the UK toy market post lockdown are +17% 25 25 20
own are +17%
25 20 15
10 10 5 5
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st Lockdown % Trend vs. 2019
15 10 5 0
Pre-4.8 Lockdown % Trend vs. Post Lockdown % Trend vs. 2019 Pre Lockdown % Trend vs. Post Lockdown %2019 Trend vs. 2019 2019 Pre Lockdown % Trend vs. Post Lockdown % Trend vs.
DocumentThe classification: Party Confidential NPD Group,Client/Third Inc. | Proprietary and confidential Source: The NPD Group | EPOS UK | YTD Jun 08 2020 1 DocumentThe classification: Party Confidential NPD Group,Client/Third Inc. | Proprietary and confidential
DocumentThe classification: Party Confidential NPD Group,Client/Third Inc. | Proprietary and confidential
Source: The NPD Group | EPOS UK | YTD Jun 08 2020
1 Source: The NPD Group | EPOS UK | YTD Jun 08 2020
With life starting to creep back towards normality, the UK toy market trends may not be as strong as they have been over the last 12 weeks. Consumers embraced particular toy categories during this period, and the toy market met that demand admirably - even with the majority of stores being closed. There are so many unknowns still to come this year; in all of our potential scenario planning outcomes, the second half the year will have a declining trend. But one thing is for sure, the sales increase which the UK market has posted over the lockdown period have put it in a fantastic position moving into this period. Remember, for our realistic scenario of -4% to happen, the market would be -8% for the second half of the year. A market that was flat for the rest of the year would lead to a final year trend of +2%. I’m not sure anyone at the start of April would have considered that could even have be a possibility, so we can but dream.
Source: The NPD Group | EPOS UK | YTD Jun 08 2020
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