US toy sales increased 19% in first three quarters

New NPD data shows that the pandemic hasn't been that bad for the toy industry after all, with puzzles, sports toys and building sets posting skyrocketing sales.
November 2, 2020

Despite concerns over how the pandemic would affect the toy industry, toy sales in the US grew 19% to US$13.7 billion in the first three quarters of 2020, according to market research firm The NPD Group. This increase was driven largely by changing consumer behavior associated with lockdowns and school closures.

NPD’s data shows that toy sales in Q1 were flat. Global lockdowns caused major shipping delays, customs and safety inspections were backed up due to understaffing, warehouses closed down without warning, and Amazon changed its shipping policies in March to prioritize sending essential items (like personal protective equipment and cleaning supplies) to its fulfilment centers.

The struggle was apparent at most toycos. Mattel saw declines in nearly all of its toy categories in Q1 2020, with a 14% drop in gross sales. Hasbro, meanwhile, saw its revenue decline 7.5% in the first quarter as production of both toys and shows was delayed by COVID-19.

But after the majority of stores and schools closed in late March, sales jumped 17% over the next five weeks. And the 15-week period from April 19 to August 1 saw an additional 27% increase in US toy sales. This bump was driven by federal stimulus checks.

Meanwhile, Amazon Prime Day 2020, which was pushed back by the pandemic to October instead of July, grew by 54% compared to last year’s event.

Year to date in September, nine of the 11 super-categories tracked by NPD posted growth. Puzzles (up 42%), outdoor and sports toys (31%) and building sets (30%) each outperformed the total toy industry growth. The outdoor and sports toys segment represented 36% of all dollar gains for the first nine months of the year, and reported nearly US$3.5 billion in sales.

Top properties for this period included L.O.L. Surprise!, Barbie, Star Wars, Marvel, Pokémon, Disney’s Frozen, Nerf, Hot Wheels, Little Tikes and PAW Patrol.

But while things were starting to look up for the toy industry in Q3 2020—both Mattel and Hasbro saw e-commerce sales increase by 50% during the quarter—there are many factors that could still affect growth into 2021, the report said. Rising household debt, unemployment, further lockdowns and the lack of additional stimulus payments could challenge toycos in the coming months.

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