Toy Supply Chains More About Who’R’Next Than Grabbing Growth — Panjiva
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Toy Supply Chains More About Who’R’Next Than Grabbing Growth

Cons. Discr. - Retailing 156 U.S. 3297

The U.S. toy industry may be showing signs of life as retailers seek to take advantage of the absence of Toys’R’Us, the Wall Street Journal reports. One example is Target’s move to restructure its store layout to make more space for toys. That follows its move, outlined in Panjiva research of September 6 to extend its range of products offered by 1.8x.

U.S. toy imports have begun to improve with seaborne imports having increased by 2.2% on a year earlier, Panjiva data shows. That comes after they inched ahead 0.3% in August and actually having fallen 1.9% in July. It’s too soon to say whether there will be a marked improvement though given the peak shipping seasons for 2017 (up just 1.1% on 2016) and 2016 (0.4% higher than 2015) saw only lackluster growth.

THIRD YEAR OF MINIMAL GROWTH AHEAD?

Chart segments U.S. imports of toys by month. Most recent month based on seaborne imports only.   Source: Panjiva

The absence of Toys’R’Us has also led manufacturers including Hasbro to bring distribution matters into their own hands. Target’s U.S. seaborne imports of toys rose 17.7% on a year earlier in September while Hasbro’s increased by 33.4%. The latter may also reflect confidence in sales of its own lines as well as supply chain requirements of course.

TARGET AND HASBRO LOOK TO TAKE UP TOYS’R’US SLACK

Chart segments U.S. seaborne imports of toys by consignee.   Source: Panjiva

A heavy reliance on China – which accounted for 95.7% of Target’s toy imports in the past 12 months – should not be a problem unless the Trump administration decides to further escalate its trade war with China. Toys are unlikely to be captured in the short-term – more likely would be an extension in the new year if the increase in tariffs on $200 billion of products to 25% from 10% fail to extract behavioral change from the Chinese government.

TARGET HAS FEW OPTIONS IF CHINA TARIFFS EVENTUALLY EMERGE

Chart segments U.S. seaborne imports of toys by Target by origin.   Source: Panjiva

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