Melbourne, Australia (PRWEB) October 31, 2012
The Toy and Game Retailing industry in Australia is expected to experience difficult trading conditions over the five years through 2012-13, with sales declining by an annualised 0.4%. Despite consumer demand for electronic and interactive toys, trading conditions for industry operators were tough due to mounting industry competition. According to IBISWorld industry analyst Claudia Burgio-Ficca, “sales during this period were also affected by annual fluctuations in real household disposable income, interest rates, consumer sentiment, the relative share of the total Australian population aged 14 years or younger and seasonal trends”. The tough trading environment faced by operators over this period also affected industry profit levels, with operators experiencing a downwards pressure on margins due to strong price-based competition.
Sales over 2012-13 for the Toy and Game Retailing industry in Australia are projected to rise by a modest 2.1% to $1.67 billion. “Consumer demand is expected to be driven by growth in disposable income levels and a recovery in consumer sentiment”, Burgio-Ficca adds. Industry sales are also expected to benefit from the growing popularity of games with interactive entertainment continuing to provide families with good value for money. However, the industry is set to come under mounting pressure from online e-tailers and auction sites. Other competitors such as department stores and supermarkets will also continue to erode market share for retailers via their lower pricing strategy and mass promotional deals. Toy and game retailers are forecast to record steady growth over the next five years. Despite continued competition from external players, industry operators are expected to benefit from income growth, a steady increase in the relative share of Australian consumers aged 14 years and under, and consumer demand for the latest tech toys. However, retail spending on toy and game products may be hindered by volatility in consumer sentiment and rising interest rates. As a result, industry retailers will forecast to continue to diversify their operations by reviewing their product range, entering niche markets or placing greater emphasis on customer service.
Market share concentration has intensified for toy and game retailers over the past five years with the industry becoming increasingly polarised via many small retailers at one end of the spectrum and a few large firms accounting for a substantial portion of revenue at the other end. In 2012-13, the largest players are expected to be Associated Retailers and Toys “R” Us (Australia). The difficult trading environment faced by operators over this period has largely stemmed from the growing dominance of toys within department stores. In addition, the declining number of speciality stores within the industry has also affected market share concentration.
For more information, visit IBISWorld’s Toy and Game Retailing report in Australia industry page.
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IBISWorld industry Report Key Topics
Operators in this industry sell a broad range of toy and game products including dolls, hobby equipment, computer games (software and consoles) and board games. Retailers may operate as part of a chain-store network, be franchised businesses or independent players. Store merchandise is purchased from domestic manufacturers and wholesalers or imported into Australian from overseas suppliers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.