Hobby, Toy and Game Stores NAICS 459120

Feb 23, 2026 - New Trump Tariff Plan Puts Fresh Pressure on US Toy Retailers

• The US toy and hobby store industry faces renewed cost pressures after a US Supreme Court ruling struck down prior IEEPA tariffs, prompting President Donald J. Trump to impose a new 10% tariff on all US imports effective February 24, 2026, for 150 days, later signaling an increase to 15% (the maximum allowed), according to a report in The Toy Book. USMCA-compliant goods from Canada and Mexico are exempt, while Section 232 and 301 tariffs remain in place. The impact on toy retailers and suppliers is immediate. Family-owned education companies Learning Resources and hand2mind, which employ 500+ workers, were among the plaintiffs challenging earlier tariffs. The Toy Association is calling for refunds of tariffs paid over the past year and for toys to be excluded from future duties, warning that additional costs could limit small businesses’ ability to invest in employees, spur innovation, and keep toys affordable for US families.
• US toy and hobby stores face mounting profit pressure as returns and shrink reached $796 billion in 2025, according to Appriss Retail’s 2026 Total Retail Loss Benchmark Report in Chain Store Age. Of the $706 billion in total merchandise returned, 14.2% ($100 billion) was preventable loss tied to fraud and abuse, including 12% from returns abuse and 2% from fraud. Shrink accounted for another $90 billion, with 73% preventable, driven by employee theft ($26 billion), inventory errors ($19 billion), operational errors ($12 billion), and organized retail crime ($9 billion). In-store returns made up $367 billion (52%), while buy-online-return-in-store totaled $208 billion (29%) and is the fastest-growing fraud vector. For specialty toy and hobby retailers, high return volumes and preventable shrink threaten margins, even as 80% of shoppers say a good return experience boosts repeat purchases and 73% make an extra purchase after a positive return.

• The US hobby, toy, and game stores industry is projected to grow at a CAGR of 3.51% between 2025 and 2029, according to an updated forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is slower than the overall economy‘s anticipated growth. The report projects sluggish but positive economic growth in the coming years. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. Real disposable income is being limited by a slow rise of employment and higher consumption prices, with a projected increase of real disposable income of 1.8% in 2025 and 1.6% in 2026. The report noted that some shifts in consumer behavior persisted in 2025, including increased online shopping.
• The US toy and hobby store industry faces softening demand as consumer metrics weaken, according to key leading consumer indicators. The Conference Board reported its Consumer Confidence Index fell 9.7 points to 84.5 in January, the lowest since May 2014 (82.2), while the Expectations Index dropped to 65.1, well below the recession signal threshold of 80. The Present Situation Index declined 9.9 points to 113.7. Consumers grew more cautious about big-ticket purchases, with fewer saying “yes” to buying plans and more saying “maybe” or “no,” and plans to purchase furniture and TVs decreased. Meanwhile, the University of Michigan’s Index of Consumer Sentiment measured 57.3 in February, up 1.6% month over month but down 11.4% year over year, with expectations at 56.6 (-11.6% year over year). Persistent concerns about high prices and job loss suggest continued pressure on discretionary categories like toys and hobbies.