Excellent toy growth in 2020 … opportunities in 2021 for newsagents

I am grateful to have been provided a copy of a comprehensive report (from March 31, 2021) into global and Australian toy sales in 2020 comparing to 2019. The data assessed in the repot is pulled from a large pool of toy and toy related retailers in Australia and globally. The assessment itself is undertaken by the NPD Group, a research and analysis company.

The results are extraordinary. While I won’t share the report here, I can share this high level page that speaks to the terrific growth in toy revenue in Australia compared to the rest of the world in 2020 over 2019.

Deeper in the report is a list of top performing brands, some of which plenty of newsagents stock. This information and other information nearby is what we can leverage to further grow the toy category in our businesses.

Of particular interest are the Christmas results and the move, in 2020, to toys and games of >$50 in value. This is the fastest growing sub-category for the Christmas season. It interests me because too many newsagents focus on low price point toys while shoppers are happy to spend up on higher price point toys.

Looking at the results more broadly …

1. Global Trends 
   1. 8/13 Countries grew sales revenue.
   2. Australia achieved strongest growth: 22% as shown above.
   3. Q4 growth was excellent.
2. Australian Market 
   1. +22% Growth.
   2. 12out of 13 super categories grew revenue.
   3. Unlicensed Toys Grew +21% .
   4. Licensed Toys Grew +26%.
   5. 10 months of consecutive growth (adding $256m to Toy Industry).
   6. Consumers move to bigger box items > $50 items
3. Christmas performance 
   1. +16 grow revenue/
   2. Unlicensed Toys grew 19%.
   3. Licensed Toys grew 11%.
   4. 12 out of 13 super categories grew.
      – 5 categories grew faster than the total category.
4. Looking ahead into 2021 and considering early indications.
   1. Toys / games remain strong.
   2. Online in toys and games is growing faster.
   3. Movie licences are back.
   4. Puzzles and Games need to be watched / managed / promoted.
   5. Collectibles are showing a strong start to the year.
   6. Shoppers are looking for newness.

The toys / games / puzzle and related categories are good for newsagency businesses. They can make a terrific contribution. I know of newsagents doing more than $150,000 a year in these categories and achieving a 50% or more gross profit – making the GP value of the categories considerably greater than the contribution from newspapers and magazines combined.

Am I saying newsagencies should become toy shops? No, not at all. But … considering the cards we sell, doing well with toys / games / puzzles makes sense in our businesses.