NEW YORK — Will financial-market turmoil be the Grinch this Christmas?
With parents already facing high food and gas costs and slumps in the job and housing markets, the turmoil in the financial sector could further spur them to cut their spending, focus on less-expensive toys and consider which toys will get the most use, experts say.
The National Retail Federation trade group predicts holiday sales overall will rise a meager 2.2 percent to $470.4 billion, the slowest growth since 2002. Toy experts predict the hottest toys will be items like the Bakugan trading card game popular with boys, interactive toys such as Elmo Live and gaming consoles like the Nintendo Wii.
“People will be on a budget this year,” says toy analyst Chris Byrne of Timetoplaymag.com, “and there will be less inclination to go outside that budget.”
While Byrne says the toy industry is typically “recession-resistant,” this year also has the presidential election, which could distract some shoppers, and five fewer shopping days between Thanksgiving and Christmas than last year.
If parents buy their children even just one less toy each this holiday season, retailers will feel the impact, experts say.
BMO markets analyst Gerrick Johnson expects total sales of traditional toys during the last three months of the year to decline about 2 percent from the year ago period, when toy sales totaled $10.4 billion, according to market research firm NPD Group. And since prices have risen 5 percent to 10 percent as toy makers face rising costs for commodities such as oil and resin, that translates to even fewer toys sold.
However, most experts agree shoppers will cut back on gifts on adults before they stop buying toys for children.
Paul and Fay Zoellner, retirees in their 70s who live in Richmond, Va., say they will not cut back on presents of toys and cash to their grandchildren. As for gifts between the adults, “I think it’ll be light amongst ourselves,” Zoellner says.
Toys “R” Us Chief Executive Jerry Storch takes a philosophical view.
“I’ve said it over and over, Christmas will come this year,” Storch says. “I think we need to remember that parents are going to buy Christmas presents.”
five Hot toys for the holidays
Here are a few of the toys that made both Timetoplaymag.com’s “Most Wanted” list and Toy Insider’s “Hot 20.”
Elmo Live. A lifelike version of Mattel Inc.’s Fisher Price doll, who tells jokes, waves his arms and crosses his legs. For ages 18 months and up, retails for about $59.99.
Bakugan. Spin Master’s game popular with boys that includes marbles that unfold into figures and magnetic trading cards. For ages 5 and up, retails for $4.99 to $24.99.
Furreal Friends Buscuit, My Lovin’ Pup. Hasbro Inc.’s almost scarily realistic golden retriever who barks and wags his tail and responds to six different voice commands. For ages 5 and up, retails for about $179.99.
U-Dance. Hasbro’s motion-based dance game that connects to your TV and is both mat- and cord-free, so you can even perform moves like spinning around. For ages 8 and up, retails for about $74.99.
Clickables. Techno Source’s line features bracelets and charms that click together magnetically and then can be used to upload information on DisneyFairies.com to create fairies and interact. For ages 7 and up, retails for $12.99 or $29.99.
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