It’s a brisk fall afternoon in Illinois as I’m writing this. In less than 12 hours, the clock will strike midnight and Halloween will begin, ushering in 24 hours of tricks and treats before the annual arrival of Mariah Carey and peppermint lattes on Nov. 1.
While many consumers might debate the seasonality of retail (cue the “too soon!” crowd that emerges with “shock” and “outrage” when holiday decor pops up each year), the reality is that the toy industry has been focused on the holidays for months. The real trick is figuring out how to treat all the mixed messaging that has become commonplace since the pandemic first started skewing sales numbers back in 2020.
Third quarter earnings season started last week with traditional rivals Mattel and Hasbro serving up opposite results while simultaneously cautioning the same thing: another potentially lackluster holiday season.
Last year, I wrote heavily about the “duality” of the holiday season. Messages from industry players and pundits alike painted polarizingly different pictures of what the season would become (and no one really nailed it). This year is already looking like an encore engagement.
According to Circana’s 2023 Holiday Retail Outlook, U.S. consumers may spend less than last year with overall retail spending set to fall short by as much as 2.5% compared to 2022 across the typical November/December holiday season.
Conflicted spending apprehension from the consumer, combined with the potential for a three-week long last-minute spending surge in December, makes Holiday 2023 a complex one to plan for and measure.”
In a survey conducted in conjunction with the report, 29% of consumers stated that they’re planning to buy toys for those on their lists this year — the same percentage as last year. However, the U.S. toy industry should note that this year, shoppers say they’ll spend an average of $191 on toys compared to $167 last year.
While Circana predicts a potential decline in overall retail sales, Mastercard SpendingPulse believes that overall U.S. retail sales (excluding automotive) could see 3.7% year-over-year growth this holiday season.
Similarly, the 2023 Deloitte Holiday Retail Survey declares that U.S. consumers will “be holidaying like it’s 2019” with overall individual spend set to eclipse 2019’s pre-pandemic levels for the first time. That would mean a $1,652 average spend, a 14% increase over last year’s $1,455. Meanwhile, EY-Parthenon and Bain and Co. believe U.S. retail sales will grow 3% this season.
The bottom line: no one really knows what’s going to happen until it happens. But you can be certain that we’ll see more conflicting “health of retail” updates in the weeks ahead.
One bright spot that could lift a few boats within the toy industry is the holiday that’s right in front of us. According to the National Retail Federation (NRF), consumer spending on Halloween should hit a record $12.2 billion this year. For JAKKS Pacific (Disguise), Jazwares (Jazwares Costume Play), NECA (Rubies), and a growing number of toy and game makers producing seasonal products, enthusiasm for the spooky season should turn shades of orange and black into piles of green!
