Canadian Toy Industry Continues to Grow in Q1

Toronto, ON May 2, 2016 – The Canadian toy industry posted an increase of 1 per cent in the first quarter of 2016, according to global information company The NPD Group. However, according to Toy Industry Analyst Michelle Liem of The NPD Group, this moderate growth is actually somewhat understated.

“We can’t forget that last spring Target announced that it would be closing all 133 Canadian stores and exiting the market,” says Liem. “After the announcement the company implemented a number of significant markdown sales to sell down inventory and reduce losses. The clearance sales highly inflated growth in the Canadian toy industry, which skyrocketed 23 per cent in Q1 of 2015.”

When the inflated growth from Q1 of 2015 is removed the data suggests that the Canadian toy industry actually grew by approximately 7 per cent in Q1 of 2016.

What is Driving Growth?

The popularity of a number of major toy properties, including Star Wars, Shopkins and Paw Patrol continued into Q1 and helped to drive growth. Once again, content proved to be a big driver of toy sales, as nearly one third of all sales in Q1 were driven by toys based on movies, TV shows or digital/online properties.

Overall, six of the 11 supercategories grew this quarter, with the largest absolute dollar growth coming from Games & Puzzles followed by Outdoor & Sport Toys. Mid and high priced toys also helped to drive growth. Toys priced between $10 and $30 made up half of all sales in Q1 while toys priced at $50+ represented 20 per cent of total sales.

Canada’s Currency Challenge

Inflated retail prices also helped to drive growth in Q1. The foreign exchange rate has driven up the average retail prices in Canada in many categories. In fact, retail prices were up by 14 per cent in Q1, driven in large part by the weaker Canadian dollar and an increase in the cost of imported goods.

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Erick Bauer

The NPD Group, Inc.
900 West Shore Road
Port Washington, NY 11050

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