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U.S. retail sales of toys climbed 16 percent in 2020, according to NPD Group, as parents indulged their kids during the novel coronavirus pandemic. The same research organization, however, sees potential declines looming as the anniversary of the start of the pandemic approaches.
In a blog entry, Juli Lennett, NPD’s VP, industry advisor, toys, wrote that until vaccine adoption is widespread, demand for toys will remain healthy. She wrote, “Children will continue school at home, playdates will be minimal, spend on other entertainment activities will be low, and families will be looking for things to keep themselves and their children occupied and active.”
Declines nonetheless might be seen as the industry anniversaries the sales uptick occurring when lockdowns, school closures and stimulus checks initially arrived. She wrote, “What we can expect is that toy sales will be elevated above 2019 for likely the next six months or more. Because of the elevated sales in 2020, this might be recorded as declines despite the fact that sales will be strong.”
Further ahead, families assured by the vaccine will return to movie theaters, concerts, theme parks and the family vacation. At that point, NPD expects toy spending will return to 2019 levels.
Like others, the toy industry is looking to see whether newly formed routines, such as game night, will continue to boost spending once the pandemic ends.
“2020 ended up seeing extraordinary growth for the industry, which again proved its resilience, highlighted the importance of play and continue to be a strategic category for retailers,” said Mattel’s CEO Ynon Kreiz last week on his company’s fourth-quarter conference call. “The demand driven by COVID, however, is difficult to quantify as the industry was projected to grow even before the pandemic.”
Mr. Kreiz sees certain “search” categories, citing outdoor games, puzzles and building sets, as “more challenged” by tough comparisons.
Brian Goldner, Hasbro’s CEO, believes heightened interest in board games may continue. He told The Wall Street Journal, “We brought in these new families who may have had some prior experience with gaming, but it wasn’t really top of mind. We saw dedicated families certainly bought more deeply too.”
- U.S. Toy Industry Retail Sales Grew 16% in 2020 – NPD
- Metamorphosis – The U.S. Toy Industry Word for 2021 – NPD
- Mattel Reports Fourth Quarter 2020 Financial Results – Mattel
- Mattel, Inc. (MAT) CEO Ynon Kreiz on Q4 2020 Results - Earnings Call Transcript – Mattel /Seeking Alpha
- Hasbro Reports Fourth Quarter and Full-Year 2020 Financial Results – Hasbro
- Hasbro (HAS) Q4 2020 Earnings Call Transcript – Hasbro/The Motley Fool
- Hasbro, Mattel Say Toy Boom to Extend Beyond Covid-19 – The Wall Street Journal