Licensed toys remain bright spot in sluggish industry

PORT WASHINGTON, N.Y. — Ahead of the toy industry's annual convention this February, The NPD Group has reported that U.S. retail sales of toys generated $21.18 billion in 2011 compared with $21.68 billion in 2010, a decline of 2%. 

NPD looked at combined first- and second-quarter sales to account for Easter falling in a different quarter versus 2010 and found that toy industry dollars declined by close to 3% and units fell nearly 7%, as average retail prices increased by more than 4%. The same trend continued in the third quarter as dollars fell by close to 1% and units declined more than 8%, while average price rose 7%. The fourth quarter (October to December), which is usually a strong quarter for the toy industry, experienced a dollar sales decline 3% and a unit sales decline of 7%, while average retail price rose by 5%, NPD reported. 

According to The NPD Group, licensed toys, though on average 57% more expensive than non-licensed toys, were a bright spot for the industry in 2011, with dollar sales up 2% for the year. Licensed toys represented 26% of total industry sales in 2011. 

This trend will likely continue in 2012, with toy companies eager to show off their latest licensing deals at the annual Toy Fair, which takes place Feb. 12 to 15 at the Javitz Center in New York City. As in past years, attendees should expect a number of product lines connected to film's and TV's biggest properties. 

"The over-arching story for 2011 was that consumers made purchasing trade-offs. When they did buy toys, compared to last year they purchased more higher priced toys at the expense of mid to lower-priced ones," said Anita Frazier, industry analyst, The NPD Group. ”And similar to what our NPD counterparts saw in Europe, consumers appeared to 'shore up' spending on toys for their own families, while share of dollars spent for 'non-family' members declined.”

Top properties for the year based on total dollar sales (in alphabetical order) included Barbie, Cars: The Movie, Crayola, Disney Princess and Star Wars. Based on dollar sales, Cars: The Movie, Disney Princess, Star Wars, Thomas and Friends, and Toy Story topped the list of 2011's best-selling licensed properties (in alphabetical order). 

When it comes to where consumers buy toys, mass merchants captured the biggest share of the total spend at 49%. The online channel, which had shown notable growth over the last several years, was essentially flat compared to last year in absolute dollar sales, while increasing slightly in share.