Los Angeles, CA (PRWEB) July 03, 2012
The Hobby and Toy Stores industry has fought through tough conditions over the five years to 2012. During the recession, dwindling consumer sentiment and disposable income led consumers to cut back on all discretionary spending, including on toy and hobby goods. In addition, heightened external competition from discount department stores exacerbated the already-significant decline in industry demand. “Discount retailers have begun to offer lower prices to counter the tough economic times, allowing them to siphon sales from industry operators unable to lower prices and emerge as leading retailers for hobby and toy goods,” says IBISWorld industry analyst Eben Jose. As such, revenue is expected to decline at an annualized rate of 0.3% in the five years to 2012 to total $17.1 billion, despite an estimated 0.5% gain in 2012.
The Hobby and Toy Stores industry is dominated by major player Toys“R”Us; the company, combined with other major players Michaels Stores and Jo-Ann Stores, accounts for a large market share, giving this industry a high level of concentration. Some of this industry's growth has been held back by the implementation of the Consumer Product Safety Improvement Act (CPSIA) of 2008, which bans all sales of children's products that do not meet new lead and phthalates regulations. “In compliance with this law,” adds Jose, “many toy and hobby retailers have disposed of all affected inventory, incurring huge losses.” This additional cost, combined with poor industry performance, has caused profitability to fall. Because of faltering profitability, many underperforming operators have been forced to exit the industry or merge with other operators. The number of enterprises is expected to decrease at an annualized rate of 2.6% to 19,133 over the past five-year period. Retailers have also experienced change due to the influx of imported goods into the market, which has stimulated competition within the industry.
Led by rising consumer confidence and disposable income, the industry is projected to experience slightly increased sales in the five years to 2017. Armed with deeper pockets, consumers are expected to increase their expenditure on toys for their children. Furthermore, the aging baby boomer population will likely increase its participation in hobby projects and drive up sales. However, continued pressure from discount department stores and online retailers will likely limit the industry's growth. IBISWorld projects that revenue will remain relatively flat over the next five years. For more information, visit IBISWorld’s Hobby and Toy Stores report in the US industry page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Operators in this industry sell a broad range of toy and hobby goods such as traditional dolls and toys, electronic toys (including video and electronic games), board games, hobby kits, and craft supplies. These goods are retailed to the general public once they are purchased from domestic and international manufacturers and wholesalers. Operators who retail used toys and hobby goods, art supplies and collectors’ items are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized 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 US 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 Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.