Hobby, Toy and Game Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,700 companies in the US sell new toys, games, and hobby and craft products. Large firms and many small firms may engage in online sales in additiol to brick-and-mortar retailing. Companies may offer a broad selection of merchandise or specialize in an area, such as educational toys, model trains, or scrapbooking supplies. In the video game retail category, firms may sell used merchandise or offer trade-in programs.
Seasonality of Sales
The fourth quarter is critical for toy and game stores and extremely important for hobby stores.
Competition from Online Retail
The advent of online retail has fundamentally altered the toy and video game markets.
Industry size & Structure
The average hobby, toy, or game store operates out of a single location, employs about 22 workers, and generates $4-5 million annually.
- The hobby, toy, and game store industry consists of about 4,700 firms that employ 102,000 workers and generates about $21 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 86% of industry revenue.
- Large firms include Tru Kids (new parent of Toys ‘R’ Us), Gamestop, Michaels, Hobby Lobby, and Jo-Ann Stores. Large chains may have locations outside of the US.
Industry Forecast
Hobby, Toy and Game Stores Industry Growth
Recent Developments
Jul 1, 2024 - Sales, Prices Up
- Producer prices for hobby, toy, and game retailers rose for the second consecutive month in April 2024 year over year, after being mostly flat since 2020, per the Bureau of Labor Statistics (BLS). Producer prices rose 2.6% in April 2024 compared to a year ago. Sales for hobby, toy, and game stores were up 2.3% in March 2024 compared to a year ago, according to data from the Census Bureau. Meanwhile, labor costs increased, and employment fell in April 2024. Wages at sporting goods, hobby, musical instrument, book, and miscellaneous retailers rose 2.8% in April 2024, reaching an average of $20.37 per hour. Employment by hobby, toy, and game retailers fell 2.6% in April 2024 compared to a year ago, per the BLS.
- The US toy retail sales declined slightly in the first four months of the year compared to a year ago but remained higher than 2019, according to market research firm Circana. Toy industry dollar sales were down 1% from January 2024 to April 2024, though they performed better than the broader general merchandise category. Toy sales are still 38%, or about $2 billion, over 2019's sales levels. The top-selling toy for the four-month period was Squishmallows plush toys, while trading cards topped the list of the new toys. The top supercategories for dollar growth per Circana were building sets (led by LEGO Icons), explorative toys (led by Miniverse), and vehicles (led by Monster Jam). The adult toy market (buyers aged 18 and older) has been growing since the pandemic, contributing $1.5 billion in sales in the first quarter of 2024, overtaking the 3-to-5-year-old segment to become the most important age group for the toy industry. According to Juli Lennett, VP and toy industry advisor at Circana, "Tailwinds, like the growing adult toy market and spending power of higher income households and grandparents, drive positive trends. However, headwinds like rising household debt, slowing GDP growth, and fluctuating consumer confidence indicate potential challenges.”
- Several toy brands saw significant growth in 2023-2024, including Hello Kitty (27%), One Piece (18%), Hot Wheels (13%), LEGO (6%), and Barbie (3%), according to a new report by Brand Finance. The Hello Kitty brand, in particular, has benefited from massive exposure and immense popularity in its home market, generating strong sales growth. Brand Finance also released its top 10 list of most valuable toy brands in 2023-2024, with first place LEGO increasing its brand value by 6.5% to $7.9 billion. LEGO has been the most valuable toy brand for ten consecutive years. “Fueled by a year of solid sales growth, the brand has opened 147 new LEGO-branded stores worldwide, bolstered its digital presence, and rolled out innovative new product lines,” per the report. LEGO is followed in value by Bandai Namco, Barbie, Fisher-Price, Hot Wheels, Nerf, Dragon Ball, Mobile Fighter G-Gundam, Mattel, and Hatchimals.
- Consumer confidence levels fell in June 2024, after an uptick in May, according to data from The Conference Board. The Conference Board’s consumer confidence index was 100.4 in June 2024 from 101.3 in May 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those under age 35 and those in the income category of over $100,000. Plans for large appliance and smart phone purchases rose on a six-month basis, while plans for car purchases stalled.
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