Toy and Game Retailing in Australia Industry Market Research Report Now Updated by IBISWorld

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A tough trading environment has affected industry profit, with strong price-based competition putting downward pressure on margins. For this reason, industry research firm IBISWorld has updated its report on the Toy and Game Retailing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

While an overall increase in discretionary income has given consumers spending power, the weaker retail market has limited the conversion of demand into revenue

Toy and Game Retailing has endured difficult trading conditions over the past five years. While solid demand for electronic and interactive toys has provided revenue opportunities for operators, trading conditions have been tough due to intense internal and external competition. As a result, revenue is expected to contract by an annualised 2.4% in the five years through 2014-15. According to IBISWorld industry analyst Claudia Burgio-Ficca, “Revenue prospects have been affected by annual fluctuations in real household discretionary income, interest rates, consumer sentiment and the relative share of the total Australian population aged 14 years and younger.” Industry revenue is expected to post modest growth over 2014-15, rising by 1.0% to $850.0 million. The tough trading environment has affected industry profit, with strong price-based competition putting downward pressure on margins. The retail market for toy and game products has been constrained over the past five years. While an overall increase in discretionary income has given consumers the necessary spending power to drive revenue, the weaker retail market (stemming from the global financial crisis and volatile consumer sentiment) has limited the conversion of demand into revenue. Industry operators have faced mounting pressure from e-tailers, auction websites and other external players (such as traditional and discount department stores) that have been offering competitive pricing, an extended range of products and an alternative avenue for buying toys and games.

Toy and game retailers are projected to post steady growth over the next five years. “Despite continued competition from external players, industry operators are expected to benefit from an upturn in retail trading conditions,” says Burgio-Ficca. This trend is projected to be supported by growth in discretionary income, an increase in the relative share of Australian consumers aged 14 years and younger, and consumer demand for the latest tech toys. However, retail spending on toys and games is likely to be hindered by volatility in consumer sentiment and interest rates. As a result, industry retailers are expected to diversify their operations by reviewing their product ranges, entering niche markets or placing greater emphasis on customer service.

The Toy and Game Retailing industry is characterised by a medium level of concentration. Despite this, almost half of all enterprises in 2014-15 are expected to be small, non-employing operators. Barriers to entry are moderate and include medium competition, weak product differentiation and the industry's mature life cycle. However, these factors do not significantly hinder the entry of new players. Despite annual fluctuations, industry concentration has remained unchanged over the past five years. A lack of growth in concentration levels can be attributed to the difficult trading environment exhibited by the industry following the collapse of global financial markets and subsequent slowdown in retail spending.

For more information, visit IBISWorld’s Toy and Game Retailing industry in Australia report page.

Operators in the industry primarily sell a broad range of toy and game products including dolls, hobby equipment and board games. Retailers operate as part of a chain-store network, are franchised businesses or independent players. Store merchandise is purchased from domestic manufacturers and wholesalers or imported into Australia from overseas suppliers.

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IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

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.

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Gavin Smith
IBISWorld
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