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Toy Retailing - UK - March 2019

Covered in this report

This report defines toys and games as specifically children’s toys that are supplied by specialist companies and sold through independent or multiple toyshops, toy departments in department/ variety stores, grocery multiples and catalogue showrooms. In such a diverse market, there is inevitably some blurring of the definition in some categories such as in the arts and crafts sector, for example. In this instance, general stationery and artists’ materials are excluded, and only colouring sets and painting materials solely aimed at children are included.

“The toy retail landscape has seen huge changes over the last year with the loss of Toys R Us. Since its demise many retailers have been fighting to claim their piece of the pie. Given that as many people buy toys online as they do offline, Amazon is one of the retailers that gained the most from the loss of the retailer, as many feel that buying toys online gives them access to better prices. There are, therefore, opportunities for toy retailers to make the in-store shopping experience more experiential in order to encourage families to see them as a destination venue and a fun alternative to online shopping, which is a merely transactional experience.”

– Chana Baram, Retail Analyst

This report examines the following issues:

  • Who has benefited from the demise of Toys R Us?
  • Ways to win in the toy market
  • The gender problem that prevails in the toy industry

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Market declines by 4.3% in 2018
              • Figure 1: Best- and worst-case forecast of UK value sales of toys and games, 2013-23
            • Collapse of Toys R Us puts a dent in specialists’ market share
              • Figure 2: Estimated distribution of spending on toys, percentage, by type of retailer, 2014-18
            • The number of young children is decreasing, which will have a knock-on effect on toys
              • Figure 3: Projected year-on-year percentage population change, based on 2016 projections, by age at last birthday, 2013-22
            • Companies and brands
              • Smyths overtakes Argos as top toy retailer in the UK
                • Figure 4: Retailer market share estimates for toys in the UK, by value, 2016-18
              • The Entertainer opens concessions in Matalan
                • FAO Schwarz to open store in Selfridges London
                  • The consumer
                    • Toy buyers just as likely to purchase online as in-store
                      • Figure 5: Channel used for toy buying, December 2018
                    • Amazon is the most popular retailer for toy shopping
                      • Figure 6: Where people buy toys, December 2018
                    • Price tops the list of reasons to buy toys at a chosen retailer
                      • Figure 7: Reasons given for shopping at retailer where most toys were bought, December 2018
                    • Most prefer to buy toys that have been requested
                      • Figure 8: Behavioural preferences when looking to buy toys, December 2018
                    • Educational options prove popular
                      • Figure 9: Behaviour of toy shoppers, December 2018
                    • Video gaming and toys need more integration
                      • Figure 10: Attitudes towards computer games, December 2018
                    • What we think
                    • Issues and Insights

                      • Who has benefited from the demise of Toys R Us?
                        • The facts
                          • The implications
                              • Figure 11: Amazon’s Christmas toy catalogue, 2018
                            • Ways to win in the toy market
                              • The facts
                                • The implications
                                  • The gender problem that prevails in the toy industry
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Market declines by 4.3% in 2018
                                          • Collapse of Toys R Us puts a dent in specialists’ market share
                                            • The number of young children is decreasing
                                              • Cost of living post-Brexit is a big concern
                                                • Children are more likely to buy video games than toys online
                                                • Market Size and Forecast

                                                  • Market declines to £3.3 billion in 2018
                                                    • Figure 12: Best- and worst-case forecast of UK value sales of toys and games, 2013-23
                                                  • The future
                                                    • Figure 13: UK value sales of toys and games, 2013-23
                                                  • Forecast methodology
                                                  • Channels to Market

                                                    • Collapse of Toys R Us puts a dent in specialists’ market share
                                                      • Figure 14: Estimated distribution of spending on toys, percentage, by type of retailer, 2014-18
                                                    • Pureplay retailers and discounters show strong growth
                                                      • Figure 15: Percentage point difference in market share of channels to market for toy retailing, 2017-18
                                                      • Figure 16: Estimated distribution of spending on toys, percentage and value, by type of retailer, 2014-18
                                                  • Market Drivers

                                                    • The number of young children is decreasing
                                                      • Figure 17: Projected (2017-based projections) UK population at mid-years, by age at last birthday, 2013-22
                                                      • Figure 18: Projected year-on-year percentage population change, based on 2016 projections, by age at last birthday, 2013-22
                                                    • People are having fewer children…
                                                      • Figure 19: Total fertility rate (number of children per woman) across England and Wales, 2007-17
                                                    • …and are waiting to have them at an older age
                                                      • Figure 20: Standardised mean age of first-time mothers in England and Wales, 1977-2017
                                                    • Cost of living post-Brexit is a big concern
                                                      • Figure 21: Economic outlook consumer tracker, January 2019
                                                    • One in five children obese by the time they reach year six
                                                      • Figure 22: Prevalence of overweight and obesity in children, by age, 1996/97-2016/17
                                                    • Children are more likely to buy video games than toys online…
                                                      • Figure 23: Things children buy for themselves online, by age, September 2017
                                                    • …but buy toys on a more regular basis
                                                      • Figure 24: Regularity of things bought by children online, September 2017
                                                    • YouTube the most popular social media channel
                                                      • Figure 25: Teens’ and tweens’ social media usage, March 2017
                                                    • A good Christmas essential for toy retailers
                                                      • Figure 26: What people bought as Christmas gifts, December 2018
                                                  • Companies and Brands – What You Need to Know

                                                    • Smyths overtakes Argos as top toy retailer in the UK
                                                      • Shop Direct Group and Amazon make gains from Toys R Us’ demise
                                                        • B&M’s share in toys grows
                                                          • The Entertainer opens concessions in Matalan
                                                            • FAO Schwarz to open store in Selfridges London
                                                              • Advertising spend on toys increased 5% in 2018
                                                              • Market Share

                                                                • Smyths takes top spot, formerly held by Argos
                                                                  • Figure 27: Retailer market share estimates for toys in the UK, by value, 2016-18
                                                                • Shop Direct Group and Amazon make gains from Toys R Us’ demise
                                                                  • B&M’s share in toys grows
                                                                  • Competitive Strategies

                                                                    • Financial outlook of specialist retailers
                                                                      • Figure 28: Key UK financials of specialist retailers in the toy retailing market, 2015-17
                                                                      • Figure 29: Outlet numbers of specialist retailers in the toy retailing market, 2015-17
                                                                    • Christmas trading
                                                                      • Operational changes
                                                                        • Figure 30: Doddle’s partnership with The Entertainer promoted on the Doddle website, 2019
                                                                      • Acquisitions and closures
                                                                        • The Entertainer buys Poly
                                                                          • Hamleys
                                                                            • Toys R Us
                                                                              • Concessions
                                                                                • The Entertainer opens concessions in Matalan
                                                                                  • FAO Schwarz to open store in Selfridges
                                                                                  • Launch Activity and Innovation

                                                                                    • Mental health awareness
                                                                                      • Figure 31: The Entertainer’s Quiet Hour, 2019
                                                                                    • Harry Potter releases
                                                                                      • Figure 32: Harry Potter at Hamleys, 2018
                                                                                    • Harrods unveils new toy department
                                                                                      • Figure 33: Room in Harrods new toy department, 2019
                                                                                    • Barbie and National Geographic agree licensing deal
                                                                                      • Figure 34: Barbie National Geographic Playset, 2019
                                                                                    • In-store events
                                                                                      • Figure 35: Smyths Snow Ball, 2018
                                                                                    • Helpful toys
                                                                                      • Figure 36: Money Monsters, 2019
                                                                                    • Fight against plastic
                                                                                      • Figure 37: Eco-friendly toy, Junk, 2019
                                                                                    • STEM and educational toys
                                                                                      • Figure 38: BOSEbuild Headphones, 2018
                                                                                      • Figure 39: Tonies audio system, with licensed book characters, 2019
                                                                                  • Advertising and Marketing Activity

                                                                                    • Adspend on toys increased 5% in 2018
                                                                                      • Figure 40: Total above-the-line online display and direct mail advertising expenditure on toys, 2014-18
                                                                                    • Shop Direct Group now top spenders
                                                                                      • Figure 41: Very Christmas campaign, 2018
                                                                                      • Figure 42: Leading UK retail advertisers of toy products: Recorded above-the-line, online display and direct mail total advertising expenditure, 2014-18
                                                                                    • Closing the ‘Dream Gap’
                                                                                      • Figure 43: Barbie’s advert for closing the ‘dream gap’, 2018
                                                                                    • Traditional advertising methods prove popular
                                                                                      • Figure 44: Total above-the-line, online display and direct mail advertising expenditure on toy retailing, by media type, 2018
                                                                                      • Figure 45: Total above-the-line, online display and direct mail advertising of toy products, by media type, 2018
                                                                                    • Nielsen Ad Intel coverage
                                                                                    • The Consumer – What You Need to Know

                                                                                      • Toy buyers just as likely to purchase online as in-store
                                                                                        • Amazon is by far the most popular retailer for toy shopping
                                                                                          • Price tops the list of reasons to buy toys at a chosen retailer
                                                                                            • Most prefer to buy toys that have been requested
                                                                                              • Educational options prove popular
                                                                                                • Video gaming and toys need more integration
                                                                                                • Channels Used for Toy Purchasing

                                                                                                  • Toy buyers just as likely to purchase online as in-store
                                                                                                    • Figure 46: Channels used for toy buying, December 2018
                                                                                                  • As expected, toy buying dramatically reduces in those with older children
                                                                                                    • Figure 47: Channels used for toy buying, by age of child in household, December 2018
                                                                                                • Retailers Used for Toy Purchasing

                                                                                                  • Amazon is by far the most popular retailer for toy shopping
                                                                                                    • Figure 48: Where people buy toys, December 2018
                                                                                                  • Supermarkets and pureplay retailers the most popular store types
                                                                                                    • Figure 49: Types of retailers used for toy purchasing, December 2018
                                                                                                  • Specialist retailers appeal to those financially better off
                                                                                                    • Figure 50: Types of retailers used for toy purchasing, by socio-economic status, December 2018
                                                                                                  • Women more likely to shop around for toys
                                                                                                    • Figure 51: Repertoire of toy retailers shopped at, by gender, December 2018
                                                                                                • Reasons for Buying Toys

                                                                                                  • Price tops the list of reasons to buy toys at a chosen retailer…
                                                                                                    • Figure 52: Reasons given for shopping at retailer where most toys were bought, December 2018
                                                                                                  • …which gives pureplay retailers an edge over competitors
                                                                                                    • Figure 53: Reasons for shopping at the retailer where most toys were bought, by retailer type, December 2018
                                                                                                  • Christmas is the main reason to buy toys…
                                                                                                    • Figure 54: Occasions for buying toys, December 2018
                                                                                                  • …as those with less money forgo buying toys for birthdays
                                                                                                    • Figure 55: Occasions for buying toys, by socio-economic status, December 2018
                                                                                                  • Women burdened with buying for Christmas
                                                                                                    • Figure 56: Occasions for buying toys, by gender, December 2018
                                                                                                    • Figure 57: What people bought as Christmas gifts, percentage point difference between men and women, December 2018
                                                                                                • Preferences When Buying Toys

                                                                                                  • Most buy toys that have been requests
                                                                                                    • Figure 58: Behavioural preferences when looking to buy toys, December 2018
                                                                                                  • Donations to charity popular with a quarter of shoppers
                                                                                                    • Older buyers more likely to need guidance, but be better prepared
                                                                                                      • Figure 59: Behavioural preferences when looking to buy toys, by age, December 2018
                                                                                                  • Behaviour of Toy Shoppers

                                                                                                    • Educational options prove popular
                                                                                                      • Figure 60: Behaviour of toy shoppers, December 2018
                                                                                                    • Older children are more likely to be influenced by YouTubers
                                                                                                      • Figure 61: Behaviour of toy shopper, by age of child in household, December 2018
                                                                                                    • Caution due to Brexit matches voting patterns
                                                                                                      • Figure 62: Shoppers more cautious due to Brexit, by demographics, December 2018
                                                                                                    • Argos buyers most likely to want nostalgic toys
                                                                                                      • Figure 63: Toy retailing – CHAID – Tree output, December 2018
                                                                                                    • Methodology
                                                                                                      • Figure 64: Toy retailing – CHAID – Table output, December 2018
                                                                                                      • Figure 65: Toy retailing – CHAID – Table output, December 2018
                                                                                                  • Attitudes towards Toy Shopping

                                                                                                    • Video gaming and toys need more integration
                                                                                                      • Figure 66: Attitudes towards computer games, December 2018
                                                                                                    • Women particularly sensitive to toys that promote gender roles
                                                                                                      • Figure 67: Attitudes towards gendered toys, by gender, December 2018
                                                                                                    • Shopping in-store should be as experiential as possible
                                                                                                      • Figure 68: Attitudes towards the toy shopping experience, December 2018
                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                      • Abbreviations
                                                                                                        • Consumer research methodology
                                                                                                        • Appendix – Market Size and Forecast

                                                                                                          • Forecast methodology
                                                                                                              • Figure 69: Best- and worst-case forecast of UK value sales of toys and games, 2018-23

                                                                                                          Toy Retailing - UK - March 2019

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