Presents are stacked round a huge gift wrapping machine in the centre of the room and there’s a palpable air of excitement, mostly from the adults.
It’s early November and in what has now become something of a toy industry institution, St Mary’s Church in central London is playing host to the unveiling of the Dream Toys Top 12 list.
The dozen items represent the Toy Retailers Association’s pick of what they think will be the most coveted items this Christmas.
Lego’s Star Wars Rebel U-Wing Fighter features, as does a Thomas and Friends train set from Mattel, but self-styled “toyologist” Peter Jenkinson says that not everyone’s Christmas purchases will be geared towards film and TV shows.
“There’s a big demand for craft items and STEMS – science, technology, engineering, and mathematics.”
He adds that small, pocket-friendly collectable lines such as Shopkins grocery characters, should fly off the shelves.
“Kids want something they can compare and share with friends.”
The collectables trend could give the toy market a boost according to Gary Grant, chairman of the Toy Retailers Association,
“They bring people back out on to the high street because although people only tend to spend a small amount of money on a few pieces to add to a set, they do so on a regular basis.”
Toy sales have been healthy in 2016, in fact the industry is on track for its best-ever year, says analyst Frederique Tutt, of market research firm NPD Group.
“We’re expecting annual sales to reach 400 million toys for the first time, which will potentially see the industry going over the £3.3bn mark,” she says.
As well as collectables, more traditional toys have been selling well, she says.
“Board games are the fastest growing segment this year, with sales up around 15% on last year.”
However, sterling is about 18% weaker against the dollar than it was before the UK’s vote to leave the EU, and this is likely to have an impact on the prices consumers pay for toys.
Andrew Dobbie, managing director of toy industry consultants Gameplan Europe, says that if sterling continues to trade at its current lower levels, there could be price increases in 2017 – but it won’t affect firms in the same way.
“Big companies hedge up to a year in advance, so that they know what they’ll be paying for the next 12 months. If a manufacturer has hedged all their projected purchases they could theoretically hold prices.
“If they haven’t hedged it will be a different story. The next time a retailer has a purchase order, for example from the Far East where prices are in dollars, they could end up paying a lot more than before.”
Retailers would then have the choice of passing on the cost or absorbing it. But Gary Grant doesn’t think consumers will bear the whole brunt of a weak pound.
“If sterling is devalued by 18% we’ll see a rise in prices, but not necessarily by the full amount. I think 5%-10% is more realistic.”
James Murden, the co-founder of Mardles, a firm that manufactures and sells augmented reality stickers and colouring books, says the Brexit effect has been mixed.
“We have production bases in the UK and China. When we get large bulk orders, we have them made up in China. For UK orders and smaller international orders, we print in Bedfordshire and assemble the product in Bristol.
“Anything we have manufactured in Asia is costing more because we’re paying in dollars. On the flip side, our product is cheaper for our overseas customers who are paying us in euros and dollars.”
Predicted best-sellers this Christmas
- Thomas & Friends TrackMaster Sky-High Bridge Jump Mattel £99.99
- Friends Amusement Park Roller Coaster Lego £89.99
- Hot Wheels Ultimate Garage Mattel £89.99
- Star Wars Rebel U-Wing Fighter Lego £69.99
- Hatchimals Spin Master Toys £59.99
- Nerf N-Strike Elite Hyperfire Hasbro £49.99
- Snuggles My Dream Puppy Character Options £49.99
- Paw Patrol Air Patroller Spin Master Toys £39.99
- Shopkins Chef Club Hot Spot Kitchen Flair Leisure Products £24.99
- SelfieMic Worlds Apart £19.99
- Silly Sausage John Adams £19.99
- Speak Out Hasbro £19.99
Source: Toy Retailers Association
Craig Wilkins, the marketing director of toy giant Hasbro, owner of brands such as My Little Pony, Trivial Pursuit and the Nerf Blaster, is cautiously optimistic.
“Toys are the last thing that parents cut back on when money’s tight; kids always want to play and that’s not going to change.
“We really have to focus on value for money, because whether a toy is a big or small ticket item, people will still pay if they think they’re getting good value.”
The UK’s Brexit vote may not have an immediate impact on toy prices but Gary Grant says that there’s another side effect of a weaker pound – there might not be enough seasonal staff to cope with demand,
“We definitely have a challenge; a lot of temporary staff in warehouses, shops and internet packing sites are from Eastern Europe. Employment agencies that I deal with are saying that people don’t want to come to the UK for work.
“This could be down to the fact that potential employees from Poland, for example, are getting fewer euros to the pound.”
It may be a topsy turvy time in Toyland, but in central London, as the Christmas carols waft from the speakers in the church hall, there are certainly more smiles than frowns. For now at least.
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