by Doug Desjardins
Holiday season toy sales have disappointed retailers since 2003 and may have reached their nadir in 2008 when sales fell 5 percent during the holidays. But retailers are coming into the 2009 holiday season with a different strategy that may help sales rebound.
Toy industry analysts are expecting Black Friday sales to focus on value-priced toys that appeal to consumers looking for bargains. At the Time to Play Holiday Showcase in New York City in October, TimeToPlayMag.com editor Jim Silver summed up the mood when he said that parents "are going to be a lot more careful about how they spend this year." 
That's because holiday toy sales are expected to be down slightly again this year, or flat at best. According to a report from BMO Capital Markets, toy sales are projected to fall 1% during the fourth quarter of 2009. That forecast falls in line with the National Retail Federation's prediction that overall sales for 2009 will fall 1% compared to last year. For the first eight months of 2009, toy sales declined 2% to $10.3 billion, according to estimates from The NPD Group.
So it's no surprise to see that retailers are already promoting low-priced products. In October, Wal-Mart renewed its "10 Toys for $10" Black Friday event from 2008 by offering "100 Toys for $10." Toys "R" Us is promoting the fact that it has more than 1,000 toys in stock priced under $10 and taking the unprecedented step of opening temporary holiday toy shops in hundreds of shopping malls, taking advantage of low lease rates offered by mall owners saddled with thousands of empty stores. Toys "R" Us may also open stores on Thanksgiving Day for the first time.
But price won't be the only selling point promoted on Black Friday. Retailers spooked by last year's brutal sales season have cut back on orders, and that limited inventory may create a shortage of popular toys. "You're going to retailers selling people on access more than price," said toy-industry analyst Chris Byrne. "Inventories are so tight that anything in high demand will be promoted with the notion that if you want it, you'd better buy it now." Byrne said the list of must-have toys this year will include the robotic hamster Zhu Zhu Pets, Rocky the Robot Truck, Dora's Explorer Girls and Barbie Fashionistas.
Retailers are getting a helping hand from manufacturers that have adjusted their approach to the market. Mattel Brands president Neil Friedman said that 80% of its 2009 product line is priced under $30. Major manufacturers like Mega Brands and Jakks Pacific have also focused on value-priced products, with the vast majority of their toys priced in the $10 to $30 range.
Footnotes
Time to Play Holiday 2009 Most Wanted
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