Circana: U.S. Toy Industry Sales through Q3 2023 Decline 8 Percent

The following article is based on a press release issued by Circana on November 2, 2023.

November 2, 2023 | U.S. toy industry sales revenue declined by 8 percent from January through September, compared to the same nine-month period in 2022, according to Circana. Unit sales were down 9 percent and average selling prices increased 1 percent during the same period. Circana tracks approximately 78 percent of the U.S. toy retail market, capturing point-of-sale data at major retailers (but not specialty, gift, vacation, and other toy sellers).

"With consumers under significant pressure and in recent years many beginning their holiday shopping in October and early November, the closing weeks of 2023 will demand aggressive product promotion and appealing pricing," said Steve Pasierb, president & CEO of The Toy Association™. "History has shown that even in years of outright recession, parents and caring adults do not want to disappoint the kids in their lives when it comes to holiday gifts. What's more, retailers know that toys and play products bring in foot traffic and generate ecommerce visits at this vital time of year. The coming weeks will be essential to improve annual results for toy companies and retail alike."

Three of the 11 supercategories Circana tracks grew in 2023 so far, including building sets (increase of 5 percent year over year, mainly driven by LEGO icons), vehicles (+3 percent, led by Hot Wheels), and plush (+1 percent, largely thanks to Pokémon). Outdoor and sports toys continued to hold the top spot as the highest sales-generating supercategory, accounting for 20 percent share of toy sales; however, it was also the segment to experience the steepest declines, as unfavorable weather conditions earlier in the year likely hindered purchases.

The top toy properties through September include Pokémon, Squishmallows, Barbie, Star Wars, Marvel, Hot Wheels, Fisher-Price, LEGO Star Wars, Disney Princess, and NFL. Collectively, these ten properties outperformed the overall industry.

The top gaining properties were LEGO Icons, Pokémon, Super Mario Bros., Teenage Mutant Ninja Turtles, Hot Wheels, Disney Princess, Transformers, Miniverse, LEGO Speed Champions, and Lord of the Rings. Many of these properties were associated with movie releases in 2023, contributing to a partial recovery for the toy industry in July, according to Circana.

“After record-high sales during the pandemic, 2023 is a period of rebalance for the toy industry,” said Juli Lennett, U.S. toys industry advisor at Circana. “This situation is further amplified by the fact that consumers’ budgets are facing more headwinds than tailwinds this year. For manufacturers and retailers, a well-thought-out pricing strategy can mean the difference between success and failure closing out the year.”