Walmart’s Loss May Be Toys ‘R’ Us’ Gain
Something unusual happened this past holiday season. Walmart
gave up share of toy category sales.
According to a Reuters report,
a series of missteps, including cutting product selection and failing to add
floor space before Christmas, contributed to a less than Walmart-like performance
for the selling season.
"If you are a consumer and you walk into a Toys ‘R’ Us and you have a
choice of 7,000 different toys or you go to Wal-Mart where there is a choice
of 1,800 different toys, that’s a massive difference," Jim Silver, toy
analyst at Timetoplaymag.com, told the news service. "I think their SKU
reduction has led to them losing customers."
Research by NPD Group pegged toy stores
as gaining a half-a-point share during the holiday season while mass merchants
lost three percent.
"Whether you look at Target or Wal-Mart, toys are just a little accessory
to bring the customers in," Isaac Larian, CEO of MGA Entertainment, told Reuters. "Toys
are not really their focus. So this is what happens."
Vic Bertrand, chief
innovation officer at Mega Brands, told the news service, "I
don’t think the shelf space at discount (chains) is back to the levels where
it was in the early 2000s or mid 2000s."
While things did not turn out
well for the Bentonville behemoth, Toys ‘R’ Us
put on a full-court press with a large number of exclusive toys and a broader
selection than carried by big box discounters.
"We always look for products that aren’t carried by the limited assortment
mass merchant chains. That’s clearly a major focus," Jerry Storch, CEO
of Toys ‘R’ Us, told Reuters.
"Toys ‘R’ Us grew fantastically. It comes at the expense of somebody
Discussion Questions: Have toy stores as a channel regained the advantage lost over the past couple of decades to mass merchants? What do you expect the mass merchandisers and Toys ’R’ Us to do next holiday season based on the results of 2010?