Toy & Hobby Stores
Companies in this industry operate physical retail stores that sell new toys, games, and hobby and craft supplies; some also sell products online. Major companies include GameStop, Michaels, Hobby Lobby, and AC Moore Arts & Crafts (all based in the US), as well as Citta del Sole (Italy), Hamleys (UK), LEGO Group (Denmark), and Toyworld (Australia).
The global toy market generates about $90 billion in annual revenue, according to the NPD Group. The US is the world's largest toy market, accounting for nearly 30% of total sales. Areas of growth include China and India, where rising disposable income is driving increased demand.
The US toy and hobby store industry includes about 8,100 stores with combined annual revenue of about $19 billion.
Consumer spending is a key driver of demand for toy and hobby stores. In addition, population growth among young children (under 12) drives demand for toy stores, and population growth among women 35 and older drives demand for hobby stores. The profitability of individual companies depends on the ability to generate store traffic and effective merchandising. Large companies offer wide selections and deep discounts. Small companies can compete effectively by offering specialized products, providing superior customer service, or serving a local market. The US industry is highly concentrated: the top 50 companies generate about 85% of revenue.
Toy and hobby stores compete with multiple retailers offering similar products, including mass merchandisers, consumer electronics stores, and fabric and sewing goods stores. Brick-and-mortar toy stores are losing market share to online toy retailers, including Amazon.com.
Many of the toys and games sold in the US are imported, primarily from manufacturers in Asia. China, Vietnam, and Indonesia are major sources of US toy and game imports, as is Mexico.
Products, Operations & Technology
Major products include toys (30% of sales), craft supplies (15%), kitchenware and home furnishings (15%), games (6%), and sewing supplies (4%). Other products
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms