According to a Reuters report, a series of missteps, including cutting product selection and failing to add floor space before Christmas, contributed to a less than Walmart-like performance for the selling season.
"If you are a consumer and you walk into a Toys 'R' Us and you have a choice of 7,000 different toys or you go to Wal-Mart where there is a choice of 1,800 different toys, that's a massive difference," Jim Silver, toy analyst at Timetoplaymag.com, told the news service. "I think their SKU reduction has led to them losing customers."
Research by NPD Group pegged toy stores as gaining a half-a-point share during the holiday season while mass merchants lost three percent.
"Whether you look at Target or Wal-Mart, toys are just a little accessory to bring the customers in," Isaac Larian, CEO of MGA Entertainment, told Reuters. "Toys are not really their focus. So this is what happens."
Vic Bertrand, chief innovation officer at Mega Brands, told the news service, "I don't think the shelf space at discount (chains) is back to the levels where it was in the early 2000s or mid 2000s."
While things did not turn out well for the Bentonville behemoth, Toys 'R' Us put on a full-court press with a large number of exclusive toys and a broader selection than carried by big box discounters.
"We always look for products that aren't carried by the limited assortment mass merchant chains. That's clearly a major focus," Jerry Storch, CEO of Toys 'R' Us, told Reuters.
"Toys 'R' Us grew fantastically. It comes at the expense of somebody else," Mr. Larian said.