This industry consists of establishments primarily engaged in the retail sale of toys, games, and hobby and craft kits and supplies. Establishments primarily engaged in selling artists' supplies or collectors' items, such as coins, stamps, and autographs, are classified in SIC 5999: Miscellaneous Retail Stores, Not Elsewhere Classified.
Hobby, Toy, and Game Shops
In 2001, the U.S. Census Bureau reported 10,783 establishments primarily engaged in the wholesale distribution of games, toys, hobby goods and supplies, dolls, craft kits, children's vehicles, fireworks, and playing cards. On June 1, 2001, the International Council of Toy Conferences announced that toy sales worldwide reached $69.5 billion for 2000. According to the Toy Industries Association (TIA), total U.S. toy sales for 2002 were $25 billion. TIA also noted that was a 1.7 percent increase over 2001 toy sales. Stores ranged from independent shops to national chains, which sold toys and hobby supplies exclusively. Other types of stores carrying toys as part of their retail offerings include discounters, department stores, warehouse clubs, home supply stores, catalog houses, and drug stores.
Hobby, toy, and game shops represent the largest market with 8,288 establishments. Together, they shared more than 26 percent of the market. Arts and crafts supplies numbered 8,107, comprising more than 26 percent of the market. Toys and games had 4,936 retail stores and accounted for about 16 percent of the marketplace. Hobbies followed with 2,000; hobby and craft supplies had 1,872; models, toy and hobby had 1,645; dolls and accessories shared 1,442; ceramics supplies had 1,324; children's toys and games had 754; games including chess, backgammon, and other durable games had 462; and kite stores had 188.
Manufacturers of toys and games sell their products either to wholesalers, or directly to retailers, although some manufacturers sell to both retailers and wholesalers. Retailers with multiple outlets require efficient delivery systems from their manufacturers. Toy manufacturers with outdated systems have thus found it difficult to convince large retailers to carry their products.
In the hobby and craft industry, manufacturers sell products through independent sales representatives or through their own salespeople. Wholesalers and distributors often play the role of middleman. Pre-packaged craft kits are increasingly sold in non-traditional outlets. Independent craft and toy retailers now compete with nationwide chains of specialty stores as well as with large discount stores carrying craft products. HIA estimated that nearly 20,000 stores could be considered toy and hobby outlets if sewing and other craft-related fields were included.
By the mid-1990s, the top five retailers were Toys "R" Us, Inc., Kay-Bee Toy and Hobby Shops, Inc., Wal-Mart Stores, Inc., Kmart Corporation, and Target Stores Inc. In 1999, these stores accounted for 52 percent of toy sales in the United States. Many industry observers, however, believe that specialty toy stores can still thrive in this marketplace. Those emphasizing convenience, top-notch service, and quality products are most likely to succeed.
With the opening of the first Toys "R" Us in the 1950s, retailing of toys in the United States changed forever. The vast retail chain began as a bicycle shop, was transformed into a juvenile furniture store, and finally became a toy store. Additional Toys "R" Us stores were soon opened; these outlets emphasized deep discounts and wide selections.
Another key factor in the growth of the retail sale of toys was the increase in the use of television advertising. In the late 1950s and early 1960s, television promotions reached into many homes where toy purchasing decisions were made.
In the 1970s many parents expressed concern about toy safety. Several consumer groups began to lobby on behalf of toy safety, as well as in search of manufacturers and retailers who would support limitations on television advertising. The National Advertising Division of the Council of Better...