U.S. retail sales of toys climbed 4% to $18.08 billion in 2014, bolstered by strong demand for “Frozen” gear, building sets and youth electronics.
Toy sales don’t generally budge much in the U.S., a mature market for an industry that has faced decades of challenges from the technology sector — first from hardware video game systems in the 1980s, and more recently from mobile devices. But in recent years the sector has done a fairly good job focusing on basics, mostly moving away from failed efforts to add smartphones and tablets to simple toys (a plastic toy gun with room for a smartphone, for example).
The latest data from research firm NPD Group suggest that the industry should stick to what it knows best.
Building set sales, a strong category in recent years, leapt 13% in 2014. Action figures, games and puzzles were both up 9%. And NPD said that while the holiday season started off looking soft, demand picked up in the final days before Christmas.
NPD said Walt Disney’s (DIS) “Frozen” was a star performer. The firm estimates “Frozen” generated $531 million in toy sales in the U.S. alone last year, an impressive feat but not entirely surprising as Fortunehas reported that the property joins a short list that includes Tickle Me Elmo and Furby as one of the toy industry’s greatest holiday hits of all time.
There is one problematic area, however: the infant/preschool toy market. Sales of items for that market slipped 5% last year. Both Hasbro (HAS) and Mattel (MAT) have reported weaker sales for their preschool divisions, likely due to lower birth rates in the U.S.
Still, the NPD report is generally a positive indicator for Mattel and Hasbro, both of which expected to report their full 2014 results in the next few weeks. It also bodes well for privately held Lego, which dominates the building set space.
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