Star Wars merchandise the real force behind Canadian toy sales spike
TORONTO — Star Wars merchandise continued to dominate Canada’s toy industry in 2016, as the country’s overall toy sales rose six per cent in 2016.
Annual sales of toys in Canada topped $2 billion, up six per cent from 2015 toy sales of $1.9 billion, according to a recent report by market research firm NPD Group.
The Canadian market outpaced growth of five per cent in the U.S., where sales of toys reached $20.4 billion for the year.
“Most toys are imported in U.S. dollars, so companies have been forced to increase their prices, though not as much as I have seen in other industries,” said toy industry analyst Michelle Liem of NPD Canada, noting some video game prices were up 30 or 40 per cent year-over-year.
Retail toy prices rose an average of seven per cent in Canada in 2016, Liem said. In units, sales were just over flat in both countries.
The news comes after U.S. toymakers Mattel and Hasbro surprised the market with their fourth-quarter results, with the former reporting poorer than expected performance in the critical holiday quarter and the latter racking up higher than anticipated sales and earnings.
Mattel, a year after losing the Disney princess doll franchise to Hasbro, reported revenue fell 8.3 per cent year over year in the fourth quarter. At Hasbro, sales in the toymaker’s “girls” category surged 52 per cent in the fourth quarter, capping off a year of strong sales. Hasbro secured the lucrative Disney princess doll segment in early 2016 after Mattel reportedly displeased Disney executives by focusing too heavily on its own doll properties.
In the meantime, toys related to the Star Wars movie franchise have become the largest toy property in history after several years of strong growth, Liem said. “The beneficiaries of that trend are Lego and Hasbro: Lego on the building set side, and Hasbro on the action figure side,” she said.
A full third of toy sales nowadays are now tied to entertainment properties such as movies, Liem added, as toymakers reap the rewards for lucrative partnerships with studios, or produce their own shows, social media content, or movies.
“Kids want to replay the experienceof their favourite movie or characters or TV show, and when they see the toy in the store that excites them, because they can really role play through it and extend the experience of the content.”