Toy Retailing - UK - December 2010

ISSUES IN THE MARKET
Key themes
Definitions
Financial definitions
Abbreviations
FUTURE OPPORTUNITIES
Opportunity One
Guaranteed to please
MARKET IN BRIEF
Toys and games recovery after two tough years
Big focus on price in the market
Collapse of Woolworths causes shake-up in sector
Plenty of winners in the wake of Woolworths’ exit
Multichannel retailing increases range of options
Capturing both the planned and impulse element
Pester power a big influence
Bringing stores alive and guiding consumer choice
Educational element also a big factor
Strong support from manufacturers to retailers
More children will help market growth
INTERNAL MARKET ENVIRONMENT
Key points
Strong competition keeps prices down
Figure 1: Consumer price indices (not seasonally adjusted), January 2008-September 2010
Market dominated by imports
Figure 2: International trade of toys and games, 2005-09
Figure 3: Sources of imports of toys and games, 2005-09
Pester power an important influence
Figure 4: ‘I find it difficult to say no to my kids’, by gender, socio-economic group and age of children, 2010
High dependence on Christmas
Collapse of Woolworths shakes up sector
BROADER MARKET ENVIRONMENT
Key points
Younger children a boost to market
Figure 5: Child/youth population, by gender and age, 2005-15
Increase in one-child families
Figure 6: Dependent children in Great Britain, by family type, 2004-10
Older mothers have more to spend
Figure 7: Fertility rates in UK, by age of mother at childbirth, 2000-09
Negative impact of exchange rates
Figure 8: Quarterly average spot exchange rates, 2007-10
Internet increasing in importance
Figure 9: Broadband penetration, by age group, 2004-10
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Increasing industry links
Toys ‘R’ Us Dora campaign
Dressing up at Hamleys
Mighty Beanz promotion at Entertainer
Retail meets leisure
Legoland Discovery Centre
New design for Disney Store
Celebrating the launch of Toy Story 3
New product ranges
ELC seeks to broaden its audience
Charity begins at Christmas
Buzz Lightyear auction at Argos
Sponsor a soft toy at Disney
Toy Scrappage Scheme
Looking for new ideas
COMPETITIVE CONTEXT
Key points
Video games and consoles hit traditional toys and games
Figure 10: Consumer expenditure on toys and games compared to other areas, 2005-09
7-10s make toys and games top choice
Figure 11: Trends for how 7-10s spend their money, 2004-10
Purchasing declines among 11-14s
Figure 12: Trends for how 11-14s spend their money, 2004-10
Children becoming less active during leisure time
Figure 13: Children’s lifestyle attitudes, 2006-10
MARKET SIZE AND FORECAST
Key points
Toy sales show recovery after two difficult years
Figure 14: UK retail value sales of toys and games, at current and constant prices, 2005-15
The future
Figure 15: Forecast of UK retail value sales of toys and games, at current prices, 2005-15
Research methodology
THE CONSUMER – WHERE THEY BUY TOYS AND GAMES
Key points
Argos the top choice for toys and games
Figure 16: Outlets used for buying toys and games in the last 12 months, September 2010
Figure 17: Outlets used for buying toys and games, 2006 and 2010
Wide choice and ease of shopping at Argos
Toy chains limited in numbers
Half of pre-school parents shop at ELC
A magical experience from Disney
Figure 18: Purchasing of toys and games from Toys ‘R’ Us, Early Learning Centre and Disney Store, by presence of children and Mintel’s Special Groups, September 2010
Independent toyshops dwindling in numbers
Supermarkets offer value and convenience
Figure 19: Purchasing of toys and games from Tesco and Asda, by main supermarket used, September 2010
Internet important source for toys
Not ignoring the grandparents
Figure 20: Outlets used for buying toys and games in the last 12 months, by adults with no children in the household, September 2010
Number of outlets used
Figure 21: Number of outlets used for buying toys and games for a child aged under 16 in the last 12 months, September 2010
CONSUMER BUYING BEHAVIOUR
Key points
Mixture of planned and impulse buying
Figure 22: Agreement with statements on shopping behaviour when shopping for toys and games, September 2010
Older buyers need more help with ideas
Figure 23: Finding out what the child wants and impulse buying when shopping for toys and games, by age and socio-economic group, September 2010
Younger women the biggest impulse buyers
Special offers can clinch the decision
Figure 24: ‘I tend to make the most of special offers (eg 3 for 2)’, by gender, age and socio-economic group, September 2010
Pester power in the shops
Internet versus catalogues for browsing
Figure 25: Browsing the internet and catalogues for toys and games, by outlets used for buying toys and games, September 2010
More occasions for toys and games
FACTORS THAT WOULD ENCOURAGE MORE SHOPPING
Key points
Catalogues a top consumer preference
Figure 26: Factors that would encourage more shopping at a particular store, September 2010
Trying before buying aids consumer choice
Figure 27: Testing/playing with toys before buying and demonstrations of new toys, by age, September 2010
Home delivery not a major factor
Children’s activities have more limited appeal
Giving shoppers more ideas
Figure 28: Lists of bestsellers, by age group, area of gift ideas, by price and pocket money area, by age, September 2010
ATTITUDES TOWARDS BUYING TOYS AND GAMES
Key points
Educational element seen as important
Figure 29: Attitudes towards buying toys and games, September 2010
Figure 30: ‘I try to buy educational toys’, by outlets used for buying toys and games, September 2010
Traditional games have lost some of their appeal
Figure 31: ‘I look for games the whole family can play together’ and ‘I prefer buying more traditional games’, by age and socio-economic group, September 2010
Big and noisy toys not for everyone
Quality and safety important factors
Big challenge to get adults interested
Figure 32: ‘Games make good presents for adults as well as children’ and ‘I like to buy toys and games I played as a child’, by outlets used for buying toys and games, September 2010
TV adverts and peer pressure drive sales
CHANNELS OF DISTRIBUTION
Key points
Big three becomes big two
Figure 33: Distribution of toys and games, by major channels, 2007 and 2009
Argos the dominant mass merchandiser
Selected ranges at most other stores
RETAIL COMPETITOR ANALYSIS
Key points
Exit of Woolworths helps other toy retailers
Figure 34: Estimated market shares of major players, 2005-09
Combining online growth with store development
Figure 35: Review of major players, 2010
RETAILER PROFILES
The Disney Store
Figure 36: The Disney Store Ltd, financial performance, 2008 and 2009
Early Learning Centre
Figure 37: Early Learning Centre Ltd, financial performance, 2008 and 2009
The Entertainer
Figure 38: The Entertainer (Amersham) Ltd, financial performance, 2009 and 2010
Hamleys
Figure 39: Hamleys of London Ltd, financial performance, 2009 and 2010
Toys ‘R’ Us
Figure 40: Toys ‘R’ Us Ltd, financial performance, 2009 and 2010
Smyths Toys
Figure 41: Smyths Toys UK Ltd, financial performance, 2008 and 2009
Games Workshop
Figure 42: Games Workshop Ltd, financial performance, 2008 and 2009
Build-A-Bear Workshop
Argos
Supermarkets
Department stores
Other retailers
Home shopping
RETAIL ADVERTISING AND PROMOTION
Key points
Decline in advertising by toy stores
Figure 43: Main media advertising expenditure by toy stores, 2006-10
Toys ‘R’ Us the leading advertiser
Figure 44: Main media advertising expenditure by toy stores, by retailer, 2006-10
Press and TV dominate spending
Figure 45: Main media advertising expenditure by toy stores, by media type, 2006-10
Advertising peaks in run-up to Christmas
Figure 46: Main media advertising expenditure by toy stores, by month, 2006-10
Strong support from toy manufacturers
Figure 47: Main media advertising expenditure on toys and games, by manufacturer, 2006-09
APPENDIX – BROADER MARKET ENVIRONMENT
Figure 48: Broadband penetration, by demographics, 2004-10
APPENDIX – WHERE THEY BUY TOYS AND GAMES
Figure 49: Most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, by demographics, September 2010
Figure 50: Next most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, by demographics, September 2010
Figure 51: Repertoire of source of purchase for toys and games for a child aged under 16 in the last 12 months, by demographics, September 2010
Figure 52: Repertoire of source of purchase for toys and games for a child aged under 16 in the last 12 months, by source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
APPENDIX – CONSUMER BUYING BEHAVIOUR
Figure 53: Most popular attitudes towards shopping for toys and games, by demographics, September 2010
Figure 54: Next most popular attitudes towards shopping for toys and games, by demographics, September 2010
Figure 55: Attitudes towards shopping for toys and games, by most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 56: Attitudes towards shopping for toys and games, by next most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 57: Attitudes towards shopping for toys and games, by other source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
APPENDIX – FACTORS THAT WOULD ENCOURAGE MORE SHOPPING
Figure 58: Most popular factors simplifying and influencing to purchase more at the particular store, by demographics, September 2010
Figure 59: Next most popular factors simplifying and influencing to purchase more at the particular store, by demographics, September 2010
Figure 60: Factors simplifying and influencing to purchase more at the particular store, by most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 61: Factors simplifying and influencing to purchase more at the particular store, by next most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 62: Factors simplifying and influencing to purchase more at the particular store, by other source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 63: Factors simplifying and influencing to purchase more at the particular store, by number of outlets used for buying toys and games for a child aged under 16 in the last 12 months, September 2010
APPENDIX – ATTITUDES TOWARDS BUYING TOYS AND GAMES
Figure 64: Most popular attitudes towards buying toys and games, by demographics, September 2010
Figure 65: Next most popular attitudes towards buying toys and games, by demographics, September 2010
Figure 66: Factors simplifying and influencing to purchase more at the particular store, by most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 67: Factors simplifying and influencing to purchase more at the particular store, by next most popular source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010
Figure 68: Factors simplifying and influencing to purchase more at the particular store, by other source of purchase for toys and games for a child aged under 16 in the last 12 months, September 2010