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Toy Retailing - UK - March 2014

“Toys are a treat so shopping for them should reflect this. Going to shop for toys should be great fun, an experience for parents and kids. And stores should be inspiring, lively places which entertain as well as sell. If not people won’t bother to go to a toyshop, they will be more likely to buy online or from a supermarket.”

– Jane Westgarth, Senior Market Analyst

Some questions answered in this report include:

  • How can retailers escape the discounting trap?
  • Is there a future for specialist toy shops?
  • Will online retailing engulf toys?
  • Do people still value conventional toys and games?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Consumer spending on toys and games, 2008-18
            • Market factors
              • More children but fewer families
                • Stronger economy
                  • More convenient internet connections
                    • Kids use home technology to play
                      • 44% buy toys for Christmas
                        • Companies, brands and innovation
                          • Figure 2: Share of toys and games, by type of retailer, 2009 and 2013
                        • The consumer
                          • Where they buy toys
                            • Figure 3: Where people buy toys, in-store and online, December 2013
                          • Attitudes to shopping for toys
                            • Figure 4: Attitudes towards toy shopping, December 2013
                          • What would encourage them to buy from a shop?
                            • Figure 5: Factors that would encourage people to shop for toys in-store, December 2013
                          • What they think about toys and games
                            • Figure 6: Attitudes towards toys and games, December 2013
                            • Figure 7: Target groups for toys and games retailers, December 2013
                          • What we think
                          • Issues and Insights

                              • How can retailers escape the discounting trap?
                                • The facts
                                  • The implications
                                    • Is there a future for specialist toy shops?
                                      • The facts
                                        • The implications
                                          • Will online retailing engulf toys?
                                            • The facts
                                              • The implications
                                                • Do people still value conventional toys and games?
                                                  • The facts
                                                    • The implications
                                                    • Trend Application

                                                        • Trend: Never Say Die
                                                          • Trend: Extend my Brand
                                                            • Mintel futures: Generation Next
                                                            • Internal Market Environment

                                                              • Key points
                                                                • Family spending on toys and games
                                                                  • Figure 8: Changes in family spending habits on toys/games (including video games) for child (ren), June 2013
                                                                  • Figure 9: Changes in family spending habits on toys/games (including video games) for child(ren), by financial situation, June 2013
                                                                • Toys as Christmas presents
                                                                  • Figure 10: People who bought toys as gifts for Christmas 2013, by financial situation, January 2014
                                                                  • Figure 11: Toys and games bought as gifts for Christmas 2013, by age and age of children, January 2014
                                                                • Children using home technology
                                                                  • Figure 12: Technology that children use in their homes, September 2013
                                                                • What families do together
                                                                  • Figure 13: Family lifestyles, June 2013
                                                              • Broader Market Environment

                                                                • Key points
                                                                  • Children in the population
                                                                    • Figure 14: Number of children in the UK aged up to 14, by age band, 2008-18
                                                                  • Shifting lifestages
                                                                    • Figure 15: Forecast adult population trends, by lifestage, 2008-18
                                                                  • ABs remain the largest socio-economic group
                                                                    • Figure 16: Forecast adult population trends, by socio-economic group, 2008-18
                                                                  • Personal disposable income will grow
                                                                    • Seven in 10 now own a smartphone
                                                                      • Figure 17: Personal ownership of mobile phones, January 2012-September 2013
                                                                    • Connected and mobile
                                                                      • Figure 18: Household ownership of portable computers, January 2012-September 2013
                                                                  • Competitive Context

                                                                    • Key points
                                                                      • Figure 19: Consumer spend on toys and games in context, 2009-13
                                                                  • Strengths and Weaknesses in the Market

                                                                    • Strengths
                                                                      • Weaknesses
                                                                      • Who’s Innovating?

                                                                        • Key points
                                                                          • Bentalls invests in creative activities and fun
                                                                            • Ceremony at Disney
                                                                              • Create your own toy
                                                                                • Smyths has a new take on click-and-collect
                                                                                  • Gender stereotypes eliminated?
                                                                                    • Supermarkets expand own-brand goods
                                                                                      • Serving little people
                                                                                        • Industry tackles body image
                                                                                          • Figure 20: Make time to Play, Logo, February 2014
                                                                                        • Selfridges opens a dedicated toy store
                                                                                          • Figure 21: Selfridges, branded display and play table, August 2013
                                                                                      • Market Size and Forecast

                                                                                        • Key points
                                                                                          • Consumer spend on toys and games
                                                                                            • Figure 22: Consumer spend on toys and games, 2008-18
                                                                                            • Figure 23: Consumer spend on toys and games, 2009-13
                                                                                        • Channels to Market

                                                                                          • Key points
                                                                                            • Channels to market
                                                                                              • Figure 24: Share of toys and games, by type of retailer, 2009 and 2013
                                                                                              • Figure 25: Share of traditional toys and games, by type of retailer, by value, 2009-13
                                                                                            • Argos retains number one position
                                                                                              • Amazon marches on
                                                                                                • Supermarkets edge ahead
                                                                                                  • Specialists highly relevant
                                                                                                    • Impressive performance for Smyths and The Entertainer
                                                                                                      • Potential for Early Learning Centre to claw back
                                                                                                        • Other specialists generate excitement
                                                                                                          • Department stores invest
                                                                                                            • Discounters pick up momentum
                                                                                                            • Space Allocation Summary

                                                                                                              • Key points
                                                                                                                • Space allocations
                                                                                                                  • Figure 26: Toy retailers, summary space allocation, February 2014
                                                                                                                • Toys R Us incorporates nursery goods
                                                                                                                  • Smyths allocates more space to tech
                                                                                                                    • Engaging displays at Toys R Us
                                                                                                                      • Figure 27: Dolls display, Toys R Us, Brent Cross, February 2014
                                                                                                                    • Smyths carries large ranges of outdoor
                                                                                                                      • Figure 28: Bicycles display, Smyths Toys, Friern Barnet, February 2014
                                                                                                                    • The Entertainer caters well for a range of ages
                                                                                                                      • Figure 29: Pre-school toys display, The Entertainer, Westfield Shopping Centre, Stratford, February 2014
                                                                                                                    • Argos bias to ‘big’ toys
                                                                                                                      • Less than 2% space in grocery superstores
                                                                                                                        • Figure 30: Soft toys and dolls display, Asda Superstore, Watford, February 2014
                                                                                                                      • John Lewis focuses on creative play, board games and construction
                                                                                                                        • Figure 31: Games and puzzles display, John Lewis, Westfield Stratford, February 2014
                                                                                                                      • Detailed space allocation
                                                                                                                        • Figure 32: Toy retailers: Detailed space allocation, February 2014
                                                                                                                    • Retailer Profiles

                                                                                                                      • Toy specialists
                                                                                                                        • Toys R Us
                                                                                                                            • Figure 33: Toys R Us, space allocation, February 2014
                                                                                                                            • Figure 34: Toys R Us, UK sales, 2009-13
                                                                                                                            • Figure 35: Toys R Us, financial performance, 2010-13
                                                                                                                          • The Entertainer
                                                                                                                              • Figure 36: The Entertainer, space allocation, February 2014
                                                                                                                              • Figure 37: The Entertainer (Amersham), UK sales, 2009-13
                                                                                                                              • Figure 38: The Entertainer, financial performance, 2010-13
                                                                                                                            • Early Learning Centre
                                                                                                                                • Figure 39: Early Learning Centre, UK sales, 2011-13
                                                                                                                                • Figure 40: The Early Learning Centre, financial performance, 2010/11-2012/13
                                                                                                                              • Smyths Toys
                                                                                                                                  • Figure 41: Smyths Toys, space allocation, February 2014
                                                                                                                                  • Figure 42: Smyths Toys sales, 2009-12
                                                                                                                                  • Figure 43: Smyths Toys, financial performance, 2009/10-2012/13
                                                                                                                                • Mono-brand toy stores
                                                                                                                                  • Disney Stores
                                                                                                                                      • Figure 44: Disney Stores, financial performance, 2009-12
                                                                                                                                    • LEGO Stores
                                                                                                                                      • Build-A-Bear Workshop
                                                                                                                                          • Figure 45: Build-A-Bear Workshop, (The Bear Factory Ltd), UK financial performance, 2009-12
                                                                                                                                        • Smaller toy specialists
                                                                                                                                          • Games Workshop
                                                                                                                                              • Figure 46: Games Workshop (UK), financial performance, 2011-13
                                                                                                                                            • Hamleys
                                                                                                                                                • Figure 47: Hamleys financial performance, 2010-12
                                                                                                                                              • Generalist retailers with toys
                                                                                                                                                • Argos
                                                                                                                                                    • Figure 48: Argos, total turnover, year to February, 2009-13
                                                                                                                                                  • Supermarkets
                                                                                                                                                    • Figure 49: Non-grocery items bought from grocery retailers, September 2013
                                                                                                                                                  • Tesco
                                                                                                                                                      • Figure 50: space allocation, Tesco Extra, February 2013
                                                                                                                                                    • Asda
                                                                                                                                                      • Figure 51: space allocation, Asda, February 2013
                                                                                                                                                    • Sainsbury’s
                                                                                                                                                      • Department stores
                                                                                                                                                        • Figure 52: space allocation, John Lewis, February 2013
                                                                                                                                                      • General value mixed goods retailers
                                                                                                                                                        • Figure 53: Selected value mixed goods retailers, turnover, 2008-12
                                                                                                                                                      • BHS
                                                                                                                                                        • Other retailers
                                                                                                                                                          • Home shopping
                                                                                                                                                            • Amazon
                                                                                                                                                              • eBay
                                                                                                                                                                • Shop Direct
                                                                                                                                                                • Brand Communication and Promotion

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Main media advertising
                                                                                                                                                                      • Figure 54: Main media advertising, toys, all advertisers, 2009-13
                                                                                                                                                                      • Figure 55: Main media advertising, toyshops, by media type, 2009-13
                                                                                                                                                                    • Two retailers dominate
                                                                                                                                                                      • Figure 56: Main media advertising, toyshops, 2009-13
                                                                                                                                                                    • Smyths moves into top spot
                                                                                                                                                                      • Toys R Us cuts back
                                                                                                                                                                        • Early Learning slashes advertising
                                                                                                                                                                          • Non-specialist advertisers
                                                                                                                                                                            • Argos continues to promote toys
                                                                                                                                                                              • Asda’s half-price brands
                                                                                                                                                                              • The Consumer – Where People Buy Toys

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Retailers used for purchasing toys
                                                                                                                                                                                    • Figure 57: Where people buy toys, any used, December 2013
                                                                                                                                                                                  • General retailers stand out
                                                                                                                                                                                    • Toy specialists popular with ABs
                                                                                                                                                                                      • High-income households shopping at Early Learning
                                                                                                                                                                                        • Shopping in-store and online
                                                                                                                                                                                          • Figure 58: Where people buy toys, in-store and online, December 2013
                                                                                                                                                                                        • How many outlets do they use?
                                                                                                                                                                                          • Figure 59: Repertoire of outlets used for toys, December 2013
                                                                                                                                                                                          • Figure 60: Repertoire of outlets used for toys, in-store and online, December 2013
                                                                                                                                                                                      • The Consumer – Attitudes towards Toy Shopping

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Attitudes towards toy shopping
                                                                                                                                                                                            • Figure 61: Attitudes towards toy shopping, December 2013
                                                                                                                                                                                          • Special occasions matter
                                                                                                                                                                                            • Online is more convenient
                                                                                                                                                                                              • Special offers most relevant for younger children
                                                                                                                                                                                                • People plan ahead
                                                                                                                                                                                                  • Party gifts
                                                                                                                                                                                                    • Impulse buying
                                                                                                                                                                                                      • Browsing in-store but buying online
                                                                                                                                                                                                        • The influence of the child
                                                                                                                                                                                                          • Gift vouchers popular
                                                                                                                                                                                                            • Who shops with the child?
                                                                                                                                                                                                            • The Consumer – What Would Encourage People to Shop for Toys In-store?

                                                                                                                                                                                                              • Key points
                                                                                                                                                                                                                • What would encourage people to shop for toys in-store?
                                                                                                                                                                                                                  • Figure 62: Factors that would encourage people to shop for toys in-store, December 2013
                                                                                                                                                                                                                • Loyalty schemes please
                                                                                                                                                                                                                  • Older profile for catalogues
                                                                                                                                                                                                                    • Click-and-collect
                                                                                                                                                                                                                      • Ordered by price
                                                                                                                                                                                                                        • Try the toys
                                                                                                                                                                                                                          • Brands not available elsewhere
                                                                                                                                                                                                                            • Activities please
                                                                                                                                                                                                                              • Bestsellers
                                                                                                                                                                                                                                • The ideal store?
                                                                                                                                                                                                                                • The Consumer – Attitudes towards Toys and Games

                                                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                                                    • Attitudes towards toys and games
                                                                                                                                                                                                                                      • Figure 63: Attitudes towards toys and games, December 2013
                                                                                                                                                                                                                                    • Attitudes towards toys and games
                                                                                                                                                                                                                                      • Figure 64: Attitudes towards toys and games, December 2013
                                                                                                                                                                                                                                    • Women most likely to disagree that girls and boys should play with different kinds of toys
                                                                                                                                                                                                                                      • Older people least enthusiastic about advertised toys
                                                                                                                                                                                                                                        • Over-65s least influenced by pester power
                                                                                                                                                                                                                                          • People with no children in the household take least notice of size
                                                                                                                                                                                                                                            • Target groups for toy retailers
                                                                                                                                                                                                                                              • Figure 65: Target groups for toys and games retailers, December 2013
                                                                                                                                                                                                                                            • Family-centred (27%)
                                                                                                                                                                                                                                                • Figure 66: Attitudes towards toys, Family-centred target group, December 2013
                                                                                                                                                                                                                                                • Figure 67: Factors that would encourage people to shop for toys in-store, Family-centred target group, December 2013
                                                                                                                                                                                                                                              • Character toys (24%)
                                                                                                                                                                                                                                                  • Figure 68: Attitudes towards toys, Character toys target group, December 2013
                                                                                                                                                                                                                                                  • Figure 69: Factors that would encourage people to shop for toys in-store, Character toys target group, December 2013
                                                                                                                                                                                                                                                • Disengaged (20%)
                                                                                                                                                                                                                                                    • Figure 70: Attitudes towards toys, Disengaged target group, December 2013
                                                                                                                                                                                                                                                    • Figure 71: Factors that would encourage people to shop for toys in-store, Disengaged target group, December 2013
                                                                                                                                                                                                                                                  • Traditional values (29%)
                                                                                                                                                                                                                                                      • Figure 72: Where they shop for toys, Traditional values target group, December 2013
                                                                                                                                                                                                                                                      • Figure 73: Attitudes towards toys, Traditional values target group, December 2013
                                                                                                                                                                                                                                                      • Figure 74: Factors that would encourage people to shop for toys in-store, Traditional values target group, December 2013
                                                                                                                                                                                                                                                  • Appendix – Broader Market Environment

                                                                                                                                                                                                                                                      • Figure 75: GDP, PDI, consumer expenditure and savings, at current prices, 2008-18
                                                                                                                                                                                                                                                  • Appendix – The Consumer – Where People Buy Toys

                                                                                                                                                                                                                                                      • Figure 76: Most popular where people buy toys – Any used, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 77: Next most popular where people buy toys – Any used, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 78: Other where people buy toys – Any used, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 79: Most popular where people buy toys – Bought in-store, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 80: Next most popular where people buy toys – Bought in-store, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 81: Other where people buy toys – Bought in-store, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 82: Most popular where people buy toys – Bought online, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 83: Next most popular where people buy toys – Bought online, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 84: Other where people buy toys – Bought online, by demographics, December 2013
                                                                                                                                                                                                                                                    • Repertoire for all shoppers
                                                                                                                                                                                                                                                      • Figure 85: Repertoire of where people buy toys, by demographics, December 2013
                                                                                                                                                                                                                                                    • Repertoire for in-store
                                                                                                                                                                                                                                                      • Figure 86: Repertoire of where people buy toys in-store, by demographics, December 2013
                                                                                                                                                                                                                                                    • Repertoire for online
                                                                                                                                                                                                                                                      • Figure 87: Repertoire of where people buy toys online, by demographics, December 2013
                                                                                                                                                                                                                                                  • Appendix – The Consumer – Attitudes towards Toy Shopping

                                                                                                                                                                                                                                                      • Figure 88: Most popular attitudes towards shopping for toys, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 89: Next most popular attitudes towards shopping for toys, by demographics, December 2013
                                                                                                                                                                                                                                                  • Appendix – The Consumer – What Would Encourage Them to Shop In-store?

                                                                                                                                                                                                                                                      • Figure 90: Most popular factors that would encourage people to shop for toys in-store, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 91: Next most popular factors that would encourage people to shop for toys in-store, by demographics, December 2013
                                                                                                                                                                                                                                                  • Appendix – The Consumer – Attitudes towards Toys and Games

                                                                                                                                                                                                                                                      • Figure 92: Agreement with the statement ‘It’s important to me that children learn from their toys/games’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 93: Agreement with the statement ‘Toy sets that can be added to later appeal to me’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 94: Agreement with the statement ‘It’s important for families to play games together’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 95: Agreement with the statement ‘Traditional toys/games make the best gifts for children’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 96: Agreement with the statement ‘I prefer to choose toys/games that do not occupy too much space’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 97: Agreement with the statement ‘Girls and boys should play with different kinds of toys’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 98: Agreement with the statement ‘It is worth paying more for high-quality toys’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 99: Agreement with the statement ‘I trust the safety of toys from well-known brands’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 100: Agreement with the statement ‘I would prefer to buy toys/games that children recognise from adverts on television’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 101: Agreement with the statement ‘It is difficult to ignore a child’s request for toys’, by demographics, December 2013
                                                                                                                                                                                                                                                      • Figure 102: Agreement with the statement ‘Children prefer toys that are based on film or television characters’, by demographics, December 2013
                                                                                                                                                                                                                                                    • Target groups
                                                                                                                                                                                                                                                      • Figure 103: Target groups, by demographics, December 2013

                                                                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                                                                  • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                                                                                                  • Alliance Boots UK Retail
                                                                                                                                                                                                                                                  • Amazon.co.uk
                                                                                                                                                                                                                                                  • Arcadia Group
                                                                                                                                                                                                                                                  • Argos
                                                                                                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                                                                                                  • B&M Retail
                                                                                                                                                                                                                                                  • Babies R Us
                                                                                                                                                                                                                                                  • Bank of England
                                                                                                                                                                                                                                                  • Barnardo's
                                                                                                                                                                                                                                                  • Baugur
                                                                                                                                                                                                                                                  • Bentalls Plc
                                                                                                                                                                                                                                                  • Bhs Ltd
                                                                                                                                                                                                                                                  • Blockbuster Entertainment Ltd (UK)
                                                                                                                                                                                                                                                  • British Toy & Hobby Association
                                                                                                                                                                                                                                                  • Build-A-Bear Workshop UK
                                                                                                                                                                                                                                                  • Debenhams UK
                                                                                                                                                                                                                                                  • Early Learning Centre Ltd
                                                                                                                                                                                                                                                  • Fenwick Ltd
                                                                                                                                                                                                                                                  • Games Workshop (UK)
                                                                                                                                                                                                                                                  • Hamleys of London Ltd
                                                                                                                                                                                                                                                  • Harrods Group Total
                                                                                                                                                                                                                                                  • Heston Blumenthal
                                                                                                                                                                                                                                                  • Home Retail Group
                                                                                                                                                                                                                                                  • House of Fraser Plc
                                                                                                                                                                                                                                                  • J. Sainsbury
                                                                                                                                                                                                                                                  • John Lewis Partnership
                                                                                                                                                                                                                                                  • Kiddicare
                                                                                                                                                                                                                                                  • LeapFrog Enterprises Inc.
                                                                                                                                                                                                                                                  • LEGO Company
                                                                                                                                                                                                                                                  • Marks & Spencer
                                                                                                                                                                                                                                                  • Matalan Ltd
                                                                                                                                                                                                                                                  • Mothercare Plc
                                                                                                                                                                                                                                                  • Next Group
                                                                                                                                                                                                                                                  • Selfridges Retail Ltd
                                                                                                                                                                                                                                                  • Shop Direct Group
                                                                                                                                                                                                                                                  • Smyths Toys
                                                                                                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                                                                                                  • The Bear Factory
                                                                                                                                                                                                                                                  • The Entertainer (Amersham) Ltd
                                                                                                                                                                                                                                                  • The Range
                                                                                                                                                                                                                                                  • The TJX Companies
                                                                                                                                                                                                                                                  • TJX International (TK Maxx Europe)
                                                                                                                                                                                                                                                  • Toys R Us
                                                                                                                                                                                                                                                  • Wacky Warehouse
                                                                                                                                                                                                                                                  • Walmart Stores (USA)
                                                                                                                                                                                                                                                  • WH Smith PLC
                                                                                                                                                                                                                                                  • Wilkinson Hardware Stores Ltd
                                                                                                                                                                                                                                                  • Wm Morrison Supermarkets
                                                                                                                                                                                                                                                  • Woolworths Group plc
                                                                                                                                                                                                                                                  • Wyevale Garden Centres

                                                                                                                                                                                                                                                  Toy Retailing - UK - March 2014

                                                                                                                                                                                                                                                  £1,995.00 (Excl.Tax)