Don’t you just love an incendiary headline?
So, let me tell you how we got to this number. Earlier this week Lending Tree published a report positing that tariffs could cost consumers an extra $28.6 Billon in their holiday shopping. Extrapolating that the toy business at $42B in the U.S. is about 0.57 percent of the total U.S. retail market, you get to around the $231MM figure. Lending Tree based their figures on what would happen if the 2025 tariffs had been in effect in 2024.
So anyone with half a research brain, or a smattering of statistics, would know that this is inexact math, but the point is that consumers are feeling the pinch this holiday season.
Whatever the actual statistics are (and they’re probably unknowable on a granular level), each toy company will be feeling the effects. More importantly, consumers are feeling the pinch. In anecdotal conversations in-person and online, consumers tell us they are planning to spend less overall on toys.
There are several factors that have influenced this. On one hand, parents tell us their kids have a lot of toys, and they are trying to limit purchases. However, concern about overall increases in prices, particularly food and electricity (which we hadn’t anticipated hearing) were keeping the wallets and purses closed a little bit longer this year than in the past.
Store checks in Chicago, Portland, Cleveland, and Minneapolis this past week indicated that if retailers are going to start markdowns, they haven’t yet.
UPDATE NOVEMBER 24: While Walmart and Kohl’s are reporting strong sales, Target reported a 2.7 percent drop in comparable sales versus Q3 2024. This morning, the company announced that it would be slashing prices across the board and is bringing in thousands of toys priced under $20.
One is hesitant to make predictions, but our best guess is that despite early opinions that the shopping season was going to start early due to fear of products on the shelves, it’s looking more and more like the season is going to start up after the Thanksgiving holiday this week.
Let’s hope.
What are you experiencing this Q4 so far–at least that you’re willing to share in the comments?
