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Can Black Friday Help Toy Retailers Live Happily Ever After?

Published: 20 May 2015 01:05:40 PST
You’ve seen the commercials—Target and Macy’s announced in early November they will open their doors on Thanksgiving evening for Black Friday sales. Although Black Friday has crept into Thursday in years’ past, why such a drastic move this year?

Despite an upbeat outlook for the rest of the year from the Toy Industry Association and retailers like Mattel, PIERS and The Journal of Commerce (JOC) economist Mario Moreno indicates 2011 numbers are no fairy tale. Moreno’s recent report on toy imports showed September was the eighth straight month of year-over-year decline and toy trade was unlikely to match 2010 levels.
US Toy imports in TEUs

In a November JOC article, Moreno says toy imports are being hurt by “subdued growth in national disposable income, resulting from stubbornly high unemployment and constrained wages, which are causing retailers to be extra careful with their inventory positions,” said Moreno. Bottom line—toys aren’t necessities and Americans are still struggling to cover the basics.

Moreover, Moreno points to an important inverse correlation between containerized toy import volumes and toy prices. Basically, whenever toy import prices rise, import demand falls 74 percent of the time. Price increase culprits include higher costs in resins, paper, memory chips and labor in China, as well as the strengthening of the yuan against the dollar. Labor issues are affecting other areas of Chinese manufacturing and signal a possible move to areas like Vietnam to maintain cheap labor rates.

This year, with 31 days between Thanksgiving and Christmas instead of 30, including five Saturdays (one of which is Christmas Eve), toy retailers are hoping for a last-minute boost to otherwise slumping sales. “I would say our customers are all feeling pretty positive about the holidays coming up,” said Brian G. Stockton, Mattel’s chief financial officer last month.

With PIERS, you can arm yourself with the right information to put these and other market shifts into perspective. Contact us today to have a PIERS business development manager show you how our product solutions can help you grow your business, cut expenses and so much more.

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