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Business

Toy sales surge to a record $25.1 billion amid pandemic

By
Lisa Fickenscher
Published Jan. 25, 2021
Updated Jan. 25, 2021, 3:35 p.m. ET

Toy sales in 2020 were one for the record books — and the industry can thank the pandemic.

Hot demand during coronavirus lockdowns for Barbie, LOL Surprise dolls, Star Wars and Pokemon merchandise helped fuel an eye-popping, 16-percent surge in toy sales to $25.1 billion last year, according to NPD Group.

“2020 was an unprecedented year for the US toy industry,” said Juli Lennett, a toy analyst for NPD, a prominent research firm which released the report on Monday. 

The growth comes as parents have desperately searched for ways to distract their kids amid widespread lockdowns, school closures and stimulus checks, according to NPD.

The last time the toy industry experienced similar growth was in 1980 and 1982 when Cabbage Patch dolls were all the rage and in 1999 when Pokemon became a phenomenon, said Gerrick Johnson, a toy industry analyst at BMO Capital.

“NPD is probably hesitant to call it a record year, because they capture 80 percent of the market, but it’s exceptional, fantastic growth and likely set a record,” Johnson said.

LOL Surprise, Barbie, Star Wars, Pokemon and Marvel Universe accounted for 13 percent of all toy sales last year, according to the report.

Parents bought higher ticket items rather than lots of small toys, NPD found, pointing to a decline in the number of units sold in seven of the top 11 categories.

“Parents are looking to buy things that occupy their kids” for a longer period of time, Johnson said, pointing to such best sellers as Barbie Dreamhouse Playset which retails for $186 at Target and Hot Wheels Ultimate Garage, which costs about $100 at Target.

“It’s all about keeping your kids occupied,” he said.

The toy industry has struggled over the past few years due to the bankruptcy of one of its largest retailers, Toys R Us. Sales in 2018 were down one percent to $22.4 billion and were down 3 percent in 2019 to $21.7 billion, NPD said.

Sales started spiking last year after stimulus checks were mailed out in April, resulting in May becoming the best month of 2020 — up 38 percent from a year ago, NPD said. The next peak was in October, up 33 percent, with the onset of holiday promotions including Amazon Prime day.

As the pandemic approaches the one-year milestone, there is no letup in toy spending, Johnson said.

“January has been really good because of all the gift cards,” Johnson said. “In lieu of family gatherings more gift cards than ever before were sent and the redemptions have been happening this month.”