New Report: Toy sales dropped by unexpected 8% last year despite the industry experiencing a $5.7 billion increase in sales since 2019.
A number of factors contributed to the downturn last year, including inflation, depleted customer savings and rising consumer credit card debt, reports RetailDive.
Even though customers pulled back on discretionary spending in 2023, they were still enthusiastic about Lego, per the report.
Within 11 toy supercategories tracked by Circana, three experienced growth in 2023.
Building sets were up $220 million and experienced the fastest growth, with Lego Icons, Lego Disney Classic and Lego Speed Champions dominating the category.
Plush toys had the second largest dollar gain, up $31 million, with Pokémon, Furby and Harry Potter leading the way.
Last year may have been difficult for the U.S. toy industry, but its four-year compound annual growth rate is still positive, says RetailDive.
“Economic challenges have impacted overall consumer behavior, but let’s not overlook the fact that we have seen an influx of new consumers over the past few years,” Juli Lennett, vice president and toy industry advisor at Circana, said in a statement.
“Keeping these consumers interested with new and exciting products is important for driving future growth.”
Top toy IP for 2023 included Barbie, Star Wars and Marvel, among others. Movies and streaming releases often put franchises in the spotlight, with built-in fan bases for toy sales, according to experts.
While toys have been primarily known as a category for kids, fan bases have picked up and captivated adult shoppers.
Adult consumers have even become a primary target for many companies, including Build-A-Bear, which stated teens and adults now generate around 40% of the company’s total sales.
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Also Read: A Home Improvement Retailer Now Closes All 157 Stores
Other Economy News Today
A massive clothing retailer will now lay off 357 employees, including 200 at its corporate headquarters, sources report.
Outdoor recreation retailer REI is cutting its workforce for the third time in less than 12 months, reports RetailDive.
Recreational Equipment, Inc., doing business as REI, is an American retail and outdoor recreation services corporation.
It is organized as a consumers’ co-operative.
REI sells camping gear, hiking, climbing, cycling, water, running, fitness, snow, travel equipment, and men, women and kids clothing.
In a Thursday announcement from CEO Eric Artz that was shared with employees, the executive said 357 people will be laid off — 200 employees at its Sumner, Washington, headquarters, 121 in distribution centers and 36 in other roles, including experiences.
Non-headquarters store-specific roles are not affected by the layoffs, the company said.
Those being let go were notified in one-on-one conversations on Thursday, REI said.
Employees whose jobs were cut will receive separation benefits that include severance, continuation of health coverage, and outplacement support and services.
Last February, REI laid off 167 people at its corporate headquarters as part of a restructuring.
In October, the outdoor retailer cut 275 people in a store operations overhaul.
REI has about 16,000 employees and about 180 locations in the U.S., according to its website.
In addition to this round of job cuts, Artz said the company will pursue additional cost-cutting measures this year.
They include not funding merit increases for headquarters employees, including for leaders, this year.
REI also said it will not backfill recently vacated leadership positions and it will reduce the size of its senior leadership team by 22% this year.
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Also Read: A Massive Furniture Company Now Lays Off 1,650 Employees
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