Despite the current state of the economy and retail sales, market researcher The NPD Group found that toy industry fared well in 2008, with US retail sales ringing in at US$21.64 billion, down 3% from last year’s US$22.32 billion total.

Not surprisingly, the largest drop occurred between October and December of last year with sales declining by 5%. However toy spending still had the largest share of total expenditures for kids between the ages of zero and 14 during the five weeks leading up to Christmas. Apparel and accessories, video game hardware and video/PC game software followed toys in terms of category sale size.

There were also a few toy super-categories that saw sales swings – building sets and plush saw a respective growth of 26% and 22%, while vehicles were down 16%, youth electronics sales fell 14%, and dolls marked a 10% drop.

On the retail side, with the exception of food/drug stores that saw a 1% uptick, all channels experienced drops in turnover in 2008, with mass merchant/discount and online/internet retailers’ sales falling 2% and 4%, respectively.

As for the best-performing IPs in total dollar sales last year, Barbie, Crayola, Star Wars and Webkinz came out on top, and licensed toys matched last year’s representation of total industry sales at 27%. The titles for best-selling licensed properties went to Star Wars and Disney Princess.