Toys R Us says it will offer a layaway option on big-ticket toys this holiday season -- another indication that marketers are worried about the Grinchy Christmas headed their way.
That news comes at a time when toy marketers are reporting lower sales, as well as a continued shift in toy-shopping behavior. Last year at this time, for example, 23% of all shoppers said they planned to do at least some holiday shopping at a toy store, reports NPD Group. This year, only 20% plan to do so. That also extends to video games, and the Port Washington, N.Y.-based market research company says just 15% will shop in video game/entertainment specialty stores this season, down from 16% last year.
Toys R Us says its "Big Gift" layaway program will be supported with both print and online ads, as well in stores, and will allow consumers to reserve pricier items such as ride-on toys and dollhouses as well as items like cribs, car seats and strollers with a 20% deposit and a 10% service fee. All payments must be made by Dec. 6 to ensure that the item -- which may take 7 to 10 days for delivery -- is available by Christmas.
Along with the Wayne, N.J.-based chain's free online shipping and buy-two-get-the-third-free specials, such offers are setting the tone for a cost-cutter's Christmas. Wal-Mart Stores, Target and Kmart have also announced aggressive price cuts in their toy prices.
Meanwhile, Hasbro says its third-quarter revenues slipped 2% to $1.28 billion -- from $1.3 billion -- in the same period last year, while earnings rose 11% to $150.4 million, up from $138.2 million a year ago. The Pawtucket, R.I.-based company, which is riding relatively high on the success of its Transformers licensing, nonetheless says the global environment continues to be challenging. And while it sees trends improving in the coming quarter and saw strong sales in its boys' products, it reported declining sales for girls, preschool toys and in the games and puzzles category.
And at Mattel, worldwide sales fell 8% in the third quarter to $1.79 billion -- from $1.95 billion last year -- while net income slipped to $229.8 million, compared to last year's net income of $238.1 million. That reflects an 8% drop in its Barbie brand, as well as 4% decline in Fisher-Price products. (Sales at its Hot Wheels brand are up 9%, and the American Girl division gained 4%.) Declines were much steeper-- 19% -- in its other girls brands, with big fall-offs in the High School Musical and Polly Pocket lines.