The pandemic was a real boon to the toy industry, what with every kid in the country cooped up at home. Over the first two years of COVID, toy sales in the U.S. grew by around 33%, according to figures from analysts at the NPD Group.
But last year was a bit of a comedown, with sales declining by 0.2%. The picture looks even worse for one of the largest companies in the industry: Hasbro.
The company behind Monopoly, My Little Pony and Magic: The Gathering says that its revenue in the fourth quarter of last year — around the holidays — was down 17% from the year before. The toy company will be laying off about 1,000 employees, or about 15% of its workforce.
At Shananigans Toy Shop in Baltimore, where toys are stacked to the ceiling, owner Flora Stelzer points out a classic Hasbro game.
“Twister is popular,” she said. “Although I have to say, it’s been a little less popular just because of COVID.”
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A lot of people picked up a game habit during the pandemic and are still buying games and toys, she said. “People don’t want to stint on toys for kids.”
Toys are an example of what economists call inelastic goods; people will buy them pretty much no matter what the economy is like.
The layoffs at Hasbro reflect that the toy industry is emerging from a crazy couple of years, according to independent toy analyst Chris Byrne.
“We had an anomalous expansion, and we may be coming back to Earth a little bit,” he said.
Smaller, leaner toymakers have been doing really well, Byrne said. And Hasbro may be moving in that direction. “I think that’s actually a good thing, even though the transition may be a little bit challenging.”
Some consumers are trying to be more flexible, too. Outside of Shananigans Toy Shop was customer Jenn Adamo.
“I have five kids, so our toy consumption is always pretty high,” she said.
One might say—an inelastic good. But she does usually set a limit for things like gifts.
“I think usually we — when we’re going to a birthday party — will usually do like $25, $30. So I guess the person will get less if things are more expensive, because you can buy fewer things,” she said.
She adds if it doesn’t seem like enough, she might spend a little bit more.
“If there’s a real buzzword for 2023 I think it’s value,” James Zahn, editor in chief at The Toy Book, a trade publication. “Because the major chains had such an over stock the end of last year with a lot of extra inventory, a lot of that ends up getting bounced into the the value or the closeout channel.”
One thing that’s doing really well right now? Plush toys.
“Everybody likes to have comfort. You know, something to hug,” said Shananigans Toy Shop owner Flora Stelzer.