by Juli Lennett, vice president, industry advisor, U.S. toys, The NPD Group
After two years of record-breaking growth in 2020 and 2021, U.S. toy industry dollar sales increased by 2% or $231 million to $11.4 billion for January-June 2022, according to The NPD Group. Unit sales declined 6% and the average selling price (ASP) increased 8% to $11.30. While the growth to date so far this year has been somewhat tempered, it comes after an increase in sales of 18% in 2020 and 20% in 2021. Looking at the three-year compound annual growth rate (CAGR) from 2019-2022, toy industry dollars grew 13%, driven by ASP growth of 11%, while units were up 2% during the same period.*
Across the 13 general merchandise categories that NPD tracks, the toy industry has gained 0.3 share points of the consumer wallet overall year-to-date as of June 2022, underscoring the resiliency of toys during an inflationary period. Furthermore, buyer penetration increased 0.1% resulting in a gain of about 155,000 buyers overall in the first six months of this year. Buyer penetration has been mostly flat all year — which is positive, as it suggests the industry is retaining the substantial increases in new buyers from the last few years. Overall, the toy industry has seen an increase of nearly 16 million buyers compared to 2019.**
Supercategory Performance
Four of the 11 supercategories tracked by NPD posted growth so far this year. Compared to 2019, 10 supercategories posted a positive three-year CAGR. Outdoor and Sports Toys continued to be the largest supercategory with $2.7 billion in sales. Plush had the largest dollar gain of $301 million and the fastest dollar growth of 43%.
Top Properties and Main Drivers of Growth
Looking at the Plush supercategory, Squishmallows, Magic Mixies, and Disney brands were the main drivers of growth. Squishmallows had seven of the top 15 selling toys for the total toy industry year-to-date January-June 2022.
Explorative and Other Toys grew 28%. National Basketball Association-, National Football Association-, and Major League Baseball-licensed products dominated the growth in the category as trading cards continue to be red hot.
Action Figures and Accessories also grew double digits. With the release of the film Jurassic World Dominion in June, the Jurassic World property had the largest growth, followed by Funko Pop! and Sonic The Hedgehog, which also had a movie release in April. Lastly, Building Sets was up 8% with LEGO Star Wars driving the largest amount of growth followed by LEGO Creator Expert and LEGO Technic.
Year-to-Date Consumer Insights for The First Half of 2022
Using NPD’s proprietary checkout data, three key consumer insights have been identified for YTD June 2022.**
- Adults with no children in the household outpaced households with children. Households without children grew 4%, while those with children grew only 1%.
- Households with an income of more than $100,000 grew 6%, while households with an income of less than $50,000 declined 2%.
- Consumers are making fewer trips to buy toys and are buying fewer toys per trip, but are spending more money overall. The trend of making fewer trips and buying fewer toys is being driven by consumer behavior in physical stores, whereas in the online channel, consumers are making more trips and are buying more toys per trip — resulting in stronger digital growth.
Looking Ahead
There is no doubt that we are in the midst of a period of economic uncertainty. As we emerge from the pandemic, the realities of inflation, the potential of a recession, and the unpredictability of the geopolitical climate continue to challenge the retail landscape. The good news is that the toy industry has been historically resilient during recessionary periods.
Given the headwinds mentioned above, it is clear that the next six months are far from predictable. However, if the pandemic has taught us anything, it is that during periods of economic uncertainty parents will prioritize their kids’ happiness above all else. And while I do predict some change for the industry in the coming year, it’s worth keeping in mind that sales are up 45% compared to year-to-date June 2019.
- *Source: The NPD Group/ U.S. Toys Retail Tracking Service, January-June 2022
- **Source: The NPD Group/Checkout/U.S. Toys
This article was originally published in the September 2022 Fall Toy Preview edition of The Toy Book. Click here to read the full issue!
