"Kids' Toys Not Selling"... Santa Claus May Need to Shorten Working Hours

Reduced Private Consumption Capacity Amid High Inflation and Growth Slowdown
Toy Sales Plummet Even on Black Friday

It appears that Santa Claus will be less busy this year compared to last year. This is because the number of gifts to be delivered to children around the world is expected to significantly decrease.

Although orders should be pouring in ahead of Black Friday and Christmas, reports indicate that retail orders are lower than usual.

On the 16th (local time), major international media outlets cited executives from global toy manufacturers, reporting that toy sales during November's Black Friday and December's Christmas period are expected to noticeably decline compared to previous years.

[Photo by Yonhap News]

Major media outlets stated, "Consumers worldwide are struggling to cope with high prices and slowing economic growth," adding, "After purchasing essential items such as groceries, consumers in the US and Europe have limited spending capacity."

In fact, forecasts suggest that the global economic growth rate will slow next year compared to this year, with reports indicating that the world economy is entering a prolonged low-growth phase. On the same day, leading global financial institutions and economists predicted that the global economic growth rate will slow from 2.9% this year to 2.6% next year. Most economists believe there is a high likelihood of mild recessions in Europe and the UK.

These forecasts seem to be affecting this year’s Christmas as well. The Hot Wheels "Scorpion Play Set," a toy car, was priced at ?35 (approximately 56,400 KRW) on Amazon UK in 2020, but this year it costs ?60 (96,600 KRW).

Earlier, toy industry giants such as Hasbro, the maker of Transformers figures, and Mattel, the maker of Barbie dolls, also warned that toy industry sales would decline this year. Industry insiders believe the market situation could be more challenging than expected.

Isaac Larian, CEO of MGA Entertainment, the maker of the fashion doll Bratz, told the media, "Holiday sales, including this Christmas period, are expected to decrease by 10-12% compared to the same period last year."

On November 24, 2021, Barbie dolls are displayed at the FAO toy store in Manhattan, New York.
[Photo by Reuters·Yonhap]

Bratz dolls, featuring four different skin tones and dressed in bold tank tops, bell-bottom pants, and miniskirts, made a significant impact upon release. According to the Asian Wall Street Journal, in 2002, Bratz even proudly surpassed Barbie, which had long held the top spot in fashion doll sales rankings.

The gloomy outlook for the global economy has also affected action figures like Transformers and Spider-Man, according to global market research firm Euromonitor. Worldwide sales of action figures are expected to decline by 2%.

According to Panjiva, a trade data analysis firm under S&P Global Market Intelligence, US toy imports in dollar terms from June to August this year plunged 32% compared to the same period last year.

[Photo by Yonhap News]

In the US, concerns about slowing consumer spending are growing ahead of Black Friday. According to The New York Times (NYT), Walmart’s profit forecast released that day projected earnings per share of $6.40 to $6.48, below the market expectation of $6.50 per share.

This can be interpreted as retailers importing less due to concerns about declining demand, despite this period typically being when orders concentrate in preparation for Black Friday and Christmas.

Target, a major US retailer, also expressed concerns about slowing consumer spending when it announced its earnings the previous day. Target’s sales in the last quarter decreased by about 5% compared to the same period last year. Signs of slowing consumption are also evident in US economic indicators. Retail sales in the US last month totaled $705 billion, down 0.1% from the previous month. This is the first monthly decline in retail sales in seven months since March.