How many people have decided to postpone getting pregnant until they can go to a hospital without fear of getting Covid19?
We have all been sweating our way through the Coronavirus and the negative impact it has been having on business. It is very possible, however, that we are going to see an unanticipated long-term impact dure to the virus: A decline in the number of children.
The United States, along with many developed countries, has for some time now been experiencing a decline in the birthrate. Any reduction in the number of births results in fewer children and that is never good news for any child-dependent industry. The toy industry is, of course, one such industry.
According to a recent announcement by the CDC, U.S. births have dropped to their lowest level in 35 years. The total births per one thousand women were 1,705. We need to be at 2,100 to replace ourselves.
What caught my attention was that, in releasing the data, the CDC indicated that we could see a further decrease due to Coronavirus. The cause being a decline in family formation.
Family formation occurs when people get married or, if not married, decide to co-habit and have babies. We saw a decline in family formation after the Great Recession in 2007 because, due to a lack of jobs, young people were less inclined to get married or have babies.
This time, the cause is a drop in the number of people getting married or having babies due to Coronavirus. How many weddings are being postponed because people are not being allowed to congregate? How many couples have decided to postpone getting pregnant until they can go to a hospital without fear of getting Covid19?
When you consider these factors plus the current restrictions on immigration, you can see that there are going to be far fewer children on the way and that is going to begin having an impact on the toy industry in about three years.
The upcoming challenge will be to determine a strategy for growing or even maintaining sales when there are fewer customers and end-users.