Toy Sales Are Up and Retail Sales Are Down; Should We Be Concerned?



Everything is pointing to a very strong year for toy sales.  NPD is predicting an increase over last year of 6.2%; Euromonitor is predicting 5.4% and Gerrick Johnson of BMO Capital is projecting 5%.  Not only that, conversations with sales reps and company owners reflect stories of early and consistent reorders.

That is why it is so puzzling that bricks and mortar retail sales for the last quarter were in the doldrums. Macy's is reporting heavy inventories due to slowed sales and is beginning markdowns (its not even Thanksgiving yet).  Nordstrom also reported slowed sales and their stock price fell accordingly. Its not just, the big department stores, Wal-Mart is expected to report lackluster sales later this week.

Its not all bad for bricks and mortar, however as Kohls beat projections as did Penneys.  Still, the report from Macy's was unexpected.  To illustrate, this is a headline that came out on November 10, the day before the retailer reported sales:  "Macy's expected to report slight dip in sales."  Here is a headline that appeared the day after: "Macy's cuts full-year forecast, sends shivers through retail." 

So, what is going on and should those in the toy and play industry be concerned?  That in my next posting.

One thought

  1. well, in the article you intentionally state “brick and mortar”, now how are their online divisions doing? Is all retail down or just brick and mortar. I know online keeps going up and up. With all the empty malls in this country maybe its time retailers really started changing with the times and realize that the big box brick and mortar weren’t the ultimate ways to shop anymore?

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