Macy’s also plans to expand the new toy departments seasonally by 500 to 3,000-square-feet.Īdding Toys”R”Us shops in its stores won’t make Macy’s a serious rival to Target’s toy business overnight. At 11 “flagship” locations, Macy’s has set aside up to 10,000-square-feet of space for Toys”R”Us. Even the smallest of the new toy shops occupy 1,000-square-feet. That was no different than the disappointing Target-Toys”R”Us partnership of 2019.īut over the past three months, Macy’s has opened Toys”R”Us shops in all of its full-line stores. While Macy’s and Toys”R”Us announced their tie-up over a year ago, initially, this merely involved the Toys”R”Us website redirecting shoppers to to make purchases. Most notably, Toys”R”Us is making another comeback attempt under yet another ownership group, this time in partnership with Macy’s. This will lead to a more competitive environment. Meanwhile, as Americans have become less concerned about Covid, they have begun visiting “nonessential” retailers more frequently. Inflation is starting to pinch discretionary budgets for lower and middle-income consumers. While Target has been firing on all cylinders in the toy category, it also faces looming threats. And during the 2020 holiday season, Target partnered with FAO Schwarz for an “ exclusive 70-piece toy collection.” After piloting 750-square-foot Disney shops in 25 stores beginning in late 2019, Target expanded its Disney shops to more than 160 locations in time for the 2021 holiday season. The company has also forged partnerships with popular kids’ brands to drive growth. And with stimulus dollars filling shoppers’ wallets, Target customers have been eager to add toys to their shopping baskets. As a one-stop shop, Target benefited from consumers consolidating shopping trips during the pandemic. To some extent, Target has been winning in the toy business since 2020 for the same reason it has been gaining market share in general. toy sales grew just 2 percent in the first half of the year, according to NPD Group. This indicates that Target continues to gain market share. Toys remained one of Target’s strongest-performing merchandise categories in the first half of fiscal 2022, including high-single-digit growth in Q2. For example, Target reported comp sales growth of more than 40 percent for its toy business in the first quarter of 2021. Toys have been a standout during this period. Sales growth has continued in 2022, albeit at a slower rate. In fiscal 2021, Target posted net sales of $104.6 billion: up by $27.5 billion (36 percent) from 2019. Sales growth accelerated dramatically during the Covid-19 pandemic. Those two categories accounted for nearly a third of Target’s top-line growth between 20. In early 2020, CEO Brian Cornell noted that Target had increased its sales in the toy and baby categories by over $1.7 billion since Toys”R”Us and Babies”R”Us folded in early 2018. Notwithstanding its weaker-than-expected results during the 2019 holiday season, Target has benefited immensely from Toys”R”Us’ downfall.
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