Potential toy shortage could dampen holiday fun

By Chris Taylor

Wed Nov 27, 2013 1:59pm EST

A woman shops at a Toy R Us store in Carle Place, New York in this November 23, 2012 file photo.

Credit: Reuters/Shannon Stapleton/Files

(Reuters) - Marine Putman got a taste of holiday craziness a tad early this year. Like, back in thefirst week of September.

That's when her 8-year-old daughter asked for a Rainbow Loom for Christmas. It was also whenPutman learned that the toy, which is used to make rubber-band bracelets, was already out of stockin local stores.

And that's the rub. Concerned about consumer reluctance, many stores are ordering fewer toys, andsome are already running out of what may be this year's favorites. That could leave many parents -especially the ones who are putting off shopping - at a loss.

"Manufacturers and retailers used to have plenty of inventory, but that doesn't happen anymore,"says Laurie Schacht, co-publisher of The Toy Insider review guide. "They create just enough, so theydon't take on too much risk. That means there will be shortages on top items."

Big chains such as Target, Wal-Mart and Toys R Us said they should be sufficiently stocked, but as ofNovember 1, toy shipments from July to November to the United States were down 2 percent,compared with 2012, according to Panjiva, which tracks the data. That follows an almost 10 percentdrop in 2012.

"Consumers are shopping later and later, and retailers don't want to be stuck with too muchinventory," said Jim Silver, editor-in-chief of TimetoPlayMag.com, a website that reviews children'stoys, videogames and books.

Some independent toy stores interviewed by Reuters already are out of some select toys or expect torun out of them before Christmas.

Tons of Toys in Wyckoff, New Jersey, expects a run on Spin Master Ltd.'s Zoomer robotic dog toysand the Disney Doc McStuffins Get Better Check-Up Center, as well as new video game systems likeXbox One and PlayStation4. The Fun-est Toy Store Ever in Ephrata, Pennsylvania, says demand forthe Rainbow Loom is "bananas," with lengthy waits for supply and waiting lists whenever productcomes in.

Meanwhile the Great Rocky Mountain Toy Co. in Bozeman, Montana, had to turn parents downlooking for the Lego Advent calendar, and Toy Market in Hammonton, N.J., says Hog Wild's AtomicPower Poppers have proven the most difficult to keep in stock.

Laurie Schacht, the "Toy Insider Mom," predicts Big Hugs Elmo (he hugs back) from Hasbro will beone of the hottest sellers. So will privately held Spin Master Ltd.'s Flutterbye Fairies (pixie dolls thatfly through the air) and Japanese-listed Tomy Co.'s Battroborgs (wirelessly controlled fightingrobots).

There are also the inevitable tech gadgets such as the LeapPad Ultra kid-friendly tablet fromLeapFrog. Then there are interactive figures like the Infinity line from Disney, Skylanders fromActivision Blizzard, and Hasbro's Angry Birds Star Wars Telepods, which kids can teleport into theirfavorite video games.

Despite such an array of Christmas catnip, analysts so far are very cautious about holidayexpectations. Total toy revenues are slated to come in around $21 billion for the year, down 2percent from last year, according to Gerrick Johnson, vice president of equity research and toyindustry analyst for investment bank BMO Capital Markets. And a new Reuters/Ipsos poll found that30 percent of shoppers expect to spend less on toys this holiday season, while 12 percent will spendmore.

"For a lot of reasons, it's not looking like an especially good holiday season," says BMO's Johnson."People are cutting back and saving money, even more so this year.

It is, after all, difficult to predict in advance which toys in particular will set kids' hearts aflame. Thatis why retail giant Wal-Mart recently brought in special consultants - a group of 1,000 kids, ages 18months to 10 years, who will try the stuff out for themselves. That led to its own "Chosen by Kids"top 20 list, including items like Mattel's Sofia the First talking doll.

"It did help with our merchandising decisions," says Wal-Mart spokeswoman Danit Marquardt of thesippy-cup summit. "In some cases it validated what we had already ordered, and in other cases weactually decided to buy more product."

It's inevitable, though, that a few toys will grab kids' attention and become very hard to find thisholiday season.

"We have to place our bets early, and every year certain items become more scarce than others,"says Lisa Harnisch, Senior VP and General Merchandising Manager for privately held retailer Toys RUs. "But we pride ourselves on having everything in stock. At this point of the year we have trucksgoing to our stores on a daily basis."

As for Marine Putman, she eventually was able to find a Rainbow Loom online. The irony: The toyhas become so popular that it has become a distraction and some primary schools have started tocrack down on it.

"It's already been banned from some schoolyards in Brooklyn," says Putman.

(Reporting By Chris Taylor; Additional Reporting By Siddharth Cavale; Editing by Jilian Mincer andGunna Dickson)

Link this

Share this

Digg this

Email

Print

Reprints