In this report, we focus on the US and UK toy markets and outline some of the trends we think are going to influence toy gifting this holiday season. Six takeaways from the report worth noting are:

  • In the first half of 2018, toy market revenues in the US were $7.9 billion, up 7% year over year. 
  • US toy market sales rose by just 1% in 2017 to $20.7 billion. 
  • In the UK, toy sales were down 2.8% in 2017 and generated £3.4 billion ($4.5 billion) in revenues.
  • This holiday season, unicorn- and dinosaur-themed toys will dominate toy sales.
  • Millennial parents are switching to throwback toys such as Little People, Barbie dolls, Hot Wheels and plush toys. 
  • Collectibles and entertainment licenses appear prominently on several retailers’ top-toys lists. 


For most people, holidays are the most wonderful time of the year and a big part of the magic of the holiday season is the joy on children’s faces on receiving their favorite toys. In the run up to Christmas every year, toy retailers and companies publish their lists of what they think will be the “top holiday toys” and run promotions and offers. With Christmas now only two months away, companies are gearing up for another busy holiday season. 

In this report, we focus on the toy industry in the US and the UK and outline the latest gifting trends that will drive sales. We have included this year’s top-toy lists from Walmart, Target, Amazon, Kmart, Kohl’s, Tesco, Argos, Hamleys and John Lewis in an appendix at the end of the report. 

Toy Retailing Sectors in the US and the UK: A Snapshot 

This section presents a snapshot of the toy markets in the US and the UK, which are the largest in the world and in Europe, respectively. 

The US Toy Market

The US toy market generated revenues of $7.9 billion in the first half of 2018, up a strong 7% year over year, according to the market research company The NPD Group. Among the several factors that helped accelerate revenue growth was the liquidation sales at Toys”R”Us that preceded its closure in June this year. The growth in the year’s first half suggests that a part of the demand may have been pulled forward from the second half of the year and we might see softer growth in the holiday season.

Many retailers are sprucing up their toy departments in a bid to grab the vacuum following the Toys“R”Us closure. 

Here are a few points that The NPD Group observed for the first half of 2018:

  • The growth in sales was driven by toys priced in the range $5–$19.99, including L.O.L. Surprise!, Total Marvel, Fingerlings, Hatchimals and Soft’n Slo Squishies.    
  • Youth Electronics was the fastest growing subcategory, up 43%. Sales in Dolls were up 17% and Action Figures and Accessories saw sales grow by 16%.
  • Sales in the Building Sets, Games and Puzzles, and Plush Toys subcategories declined by 1%, 3% and 4%, respectively. 

Across the 12 global toy retail markets it studied, The NPD Group report made the following observation for 2017:

  • Toy retail sales were up 1% both in the US and in the 12 global markets. Sales in the US reached $20.7 billion last year. 
  • Among the subcategories, Plush, Dolls and All Other Toys saw the fastest growing sales both in the US and globally. In the US, sales in the Games and Puzzles subcategory saw a 3% rise, and Plush and All Other Toys sales rose by 8% and 15%, respectively. 
  • Nerf topped the list of the three top-selling toys in the US, followed by Star Wars and Barbie, in that order. 

At 25%, the Outdoor and Sports Toys subcategory accounted for the largest share of sales. Infant, Toddler and Preschool Toys, and Dolls represented 13% each whereas Games and Puzzles accounted for 9%, of total sales. 

This year, we see a stronger presence of Youth Electronics, Dolls, and Action Figures and Accessories compared to other subcategories.

This year, the National Retail Federation (NRF) expects total retail sales to increase by 4.3%–4.8% to a total of $717.45–$720.89 billion, up from the $687.9 billion recorded during the 2017 holiday season. This forecast broadly aligns with our expectations of 4% year-over-year growth in total retail sales (excluding automobiles and gasoline) in November and December (read our detailed report, US Holiday Outlook 2018.)

The UK Toy Market

The UK toy market, which is significantly smaller than its US counterpart, generated revenues of £3.4 billion ($4.3 billion) in 2017, a 2.8% year-over-year decline, according to The NPD Group and the British Toy and Hobby Association (BTHA). This followed three years of consecutive growth. 

A total of 380 million units of toys were sold in the country in 2017, down 8.4% compared to the previous year’s 415 million units. Several factors drove the plunge, including under-performing licenses and the growing number of counterfeit toys, according to the BTHA. 

Despite these concerns, the UK still remains the largest toy market in Europe and the fourth largest in the world, after the US, China and Japan, according to The NPD Group. Among the subcategories, Collectibles saw significant year-over-year growth of 17% in 2017, representing 9% of total retail sales. The growth in the Collectibles subcategory was driven by the sales of toys that included L.O.L. Surprise! and Fingerlings.

The BTHA released details of a new survey on children’s current play patterns and use of screen time at the 65th Toy Fair—the UK’s largest toy, game and hobby showcase—that was held in London, January 23–25. The survey, which covered 1,500 parents, revealed that:

  • around 75% respondents believed that excessive screen time would make their children less sociable later in life; 
  • around 65% respondents said that excessive screen time would make their kids less active;
  • around 37% thought that their child was devoting lesser time to playing with traditional toys than last year; and,
  • 63% strongly felt that traditional unstructured play with toys is vital for a child’s development. 

Many parents admitted that they were struggling to find the right balance between screen time and play for their children. The UK toy industry has taken note of parents’ concerns and is making toys aimed at stimulation and conventional play. We believe that the key subcategories that will drive growth this year are Throwback Toys, Unicorn- and Dinosaur-Themed Toys, Collectibles and Licensed Toys. 

Coresight Research estimates that UK retail sales will rise by 4.5% year over year this holiday season, taking total sales up to £81.8 billion ($107.7 billion). Read more about our expectations in our report UK Christmas 2018 Retail Outlook: Overall Demand Looks Solid, with E-Commerce on Course to Capture 30% of Nonfood Sales. 

Themes That We Expect to Influence Toy Gifting

Every year, major retailers reveal their predictions for top trending toys for the holiday season. Listed below are four themes that we think will influence gifting and retailers’ top-toys lists this year: 

  • Pony-, Unicorn- and Dinosaur-Themed Toys;
  • Collectibles; 
  • Throwback Toys; and,
  • Entertainment Licenses.

We discuss these themes below.

Pony-, Unicorn- and Dinosaur-Themed Toys

Unicorns have for long been a popular theme across products as diverse as coffee (Unicorn Frappuccino by Starbucks), body glitter, makeup, bagels, macarons and stationery items, among others. This mythical creature has now been predicted to dominate the top-toys lists of toy retailers and companies this year. Sales of dinosaur-, pony- and unicorn-themed toys rose by 77% year-to-date through June 2018, according to the NPD Group. 

UK general-merchandise retailer Argos has said that 2018 will be the year of the unicorn, and approximately one-third of its list of top-14 toys is dominated by unicorn-themed toys. Poopsie Unicorn Slime Surprise, a unicorn that poops glitter, seems to be the biggest hit this year as it combines major trends such as slime, glitter, unicorns and poop. Poopsie comes in four different colors with food slime packets, magic packets and glitter which when combined and fed to the toy form glittery slime poop. Other unicorn-themed toys seen in lists by Argos, Walmart and Target include: My Lovely Unicorn (a battery-operated ride-on unicorn) by Feber; Myla (a “magical” make-up unicorn) by Vtech; plush toys such as Rainbocorns by Smyths Toys and Pickmi Pops Unicorn Super Flip. 

Dinosaur-themed toys saw a surge in sales in the US in the first half of 2018 driven by Fingerlings and the release of the movie Jurassic World, according to The NPD Group. Imaginext Jurassic World, T-Rex Dinosaur, on Walmart’s and Target’s lists, comes with features that children can control, such as the T-Rex’s eye which can be made to glow red (the “predator mode”) and movable jaws. The Untamed T-Rex+Raptor Jailbreak Playset on Amazon’s and Argos’s lists comes with two Fingerling creatures including a T-Rex called “Breakout” and a raptor called “Bolt”, which react to sound, motion and touch. On pulling a lever, the dinosaur in the playset bursts out of the cage. 

Throwback Toys

With a variety of tech toys in the market, respondents in the BTHA survey admitted that they were struggling to find the right balance between screen time and unstructured play. A majority of parents believe that it is important for their children to play with traditional toys for all-round development. This year, we see parents turning to classic toys and retro brands and we expect to see an influx of nostalgic toys. According to The NPD Group, sales in the Dolls subcategory increased 17% year over year in the US in the first half of 2018. Plush Toys sales declined by 4% but we may see growth in this subcategory during the holiday season. 

The Fisher-Price Little People playset is amongst the top toys in Walmart’s Top-40 list. Little People Take Turns Skyway designed for toddlers comes with three different race tracks, a launcher and racing sounds. The authentic Barbie Dreamhouse and other Barbie dolls, along with other retro toys such as Disney toys, Hot Wheels, Beyblade and Scooters are also in major retailers’ lists, including those of Walmart, Amazon and Target. 

Entertainment Licenses

Blockbuster movies and TV shows have been influencing the toy market for many years now. With latest movie releases of Blank Panther, Avengers, Jurassic World and Incredibles 2, the Action Figures and Accessories subcategory saw sales growth of 16% in the first half of 2018, according to The NPD Group. Entertainment and character licensing remain the largest industry category with revenues of $121.5 billion or 44.7% of the total global licensing market in 2017, according to the International Licensing Industry Merchandisers’ Association (LIMA). 

Sales of Star Wars toys declined in 2017 and the brand has lost its top spot in the US, according to The NPD Group. Toy company Hasbro anticipates Star Wars toys to perform well this year with the release of the latest movie of the franchise, Solo: A Star Wars Story. 

According to The NPD Group, fashion, role-play and large dolls will perform well in the upcoming year with the expected movie release of Frozen 2 in November 2019. 

Other popular toys from entertainment franchises are:

  • A Batman toy, (in Target’s list);
  • Jurassic World toys (in Walmart’s, Target’s and Amazon’s lists); 
  • PAW Patrol toys (in Amazon’s, Walmart’s, Target’s and Argos’s lists); 
  • Disney Toys (in Amazon’s, Walmart’s and Kmart’s lists); and,
  • an Incredibles 2 toy, (in Target’s list). 

Collectibles with a Surprise

YouTube’s “unboxing” videos always get children excited about what is inside the box. In recent times, the unboxing trend has gained traction and has begun to have a real influence on toy shelves. The toy industry has also introduced new variants of collectibles that focus on the act of unboxing. In the first half of 2018, global sales of collectibles grew 26%, accounting for 11% of dollar sales in the total toy industry, according to The NPD Group. L.O.L. Surprise! was ranked at the top in all the 13 countries covered by The NPD Group. Hatchimals, L.O.L. Surprise! and Barbie accounted for nearly two-thirds of the 17% growth in sales in Dolls in the first half of 2018. 

Hatchimals toys have featured prominently on several retailers’ top-toys lists since it was first introduced in late 2016. This year, Spin Master has released Hatchimals Mystery Egg, which hatches a surprise creature. It comes with four different characters that are fluffier and have expandable wings. The new Hatchimal can even learn how to say one’s name. Another latest variation of this toy is a HatchiBaby which comes in a mystery egg that will hatch to reveal either a baby boy Ponette or a baby girl Cheetree. 

L.O.L. Surprise! Bigger Surprise! contains 60 new surprises this season including exclusive dolls and accessories. There is also a new L.O.L. Surprise House with over 85 surprises. It features in top-toy lists by Walmart, Amazon and Target. 

What We Have Seen from Retailers This Year

The Toys“R”Us liquidation led to a strong toy industry growth partially supported by an emotional response from consumers and this has led to shoppers purchasing more toys overall, according to The NPD Group. Customers bought a lot of toys during Toys“R”Us liquidation sales. 

The toy industry is seeing major retailers stepping in to capture the gap in the $20.7-billion toy market left by Toys“R”US. 

We outline below a few of the initiatives undertaken by retailers in the US and the UK this year:

US Retailers

Walmart: This year, Walmart is making several changes to its toy section and has opened “America’s Best Toy Shop” online. The online shop has filters such as age, character and brand, and these help customers shop better. The company has also expanded its toy offerings by 30% in physical stores and by 40% online with new brands such as Pomsies, Fancy Nancy, Boxy Girls, Grumblies and Hairdorables. It also offered an exclusive collection from Ryan’s World until September 30. It also hosted several in-store events and demos and has brought in 25 toy influencers to offer exclusive toy content throughout the year on Walmart’s America’s Best Toy Shop. Walmart has also made a change to its Layaway program which allows shoppers to reserve products in various categories, including toys. The company is working to ensure that if the price of a toy drops before the toy is picked up, the customer gets the cheapest price automatically. 

To make holiday shopping easier, Walmart has also expanded its range of products available for free two-day shipping by including items from its marketplace partners. The company will also launch in-store returns by mid-November which will allow customers to return online purchased items to Walmart’s physical stores. 

Amazon: The company has categorized its toys according to themes such as STEM (which stands for Science, Technology, Engineering and Math) Toys, Collectibles, New Classics, Interactive Toys, Family Night and Too Cute Too Cuddly to help shoppers find gifts easily. The company is also preparing a holiday toy catalog which will be mailed to millions of US households and will also be made available at Whole Foods Market stores, according to Bloomberg. This concept is similar to the Toys“R”Us Big Book of Toys. 

Target: This holiday season, Target has launched a new digital hub for toys on its website which features a “gift finder” to help shoppers find toys easily with the help of its curated list of top toys. The company has almost doubled its assortment of toys (compared to last year) with more than 2,500 new toys. It will also offer new and exclusive gifts with many under $15. The company has expanded space for new toys by nearly a quarter-million square-feet across more than 500 stores, and has remodeled around 100 stores to make them more child-centric by adding oversized displays such as a giant three-foot LEGO slide and interactive activity walls. The retailer has been hosting in-store events for children featuring live interactions with characters from Paw Patrol, Minecraft, L.O.L. Surprise! and more. Its catalog of gifts for children includes 15% more pages for toys than last year. 

Target has also rolled out free two-day shipping for the first time to better compete with retailers such as Amazon and Walmart. The service is available from November 1 through December 22 and is an extension of the shipping offer which was launched in March for Target REDcard holders but requires no minimum purchase or membership. The company has also expanded its curbside pickup service Drive-Up to around 1,000 stores.

Party City: The company has opened 50 “Toy City” pop-up stores this holiday season, which feature a wide assortment of toys. This year, the company had also set up Halloween City pop-up stores that featured costumes for children and adults, Halloween accessories, decorations and toys. 

Kohl’s: This holiday season, Kohl’s has partnered with toy companies LEGO and FAO Schwarz to expand its toy offerings. The company is offering a wide range of LEGO building sets, comprising entertainment licenses including Jurassic World, Harry Potter, Star Wars, Disney Princesses, and more. FAO Schwarz toys include a range of classic toys such as dolls, trains, plush, and arts-and-crafts sets. The retailer is also offering its “Buy Online Pick Up In-Store” to make holiday shopping more convenient. 

UK Retailers

Argos: The retailer offered its annual three-for-two deal on toys from September 26 through October 2 to help shoppers with early Christmas shopping where by selecting three of their favorite toys, shoppers got the cheapest item for free. The retailer also offered another deal which included two toys for £15 ($20). The retailer is currently running discounts on popular toys including L.O.L. Surprise!, Hatchimals, Fingerlings and classic items from LEGO, Disney and Barbie. The company will also reveal its Black Friday deals in November. 

Tesco: This year, Tesco “wants to give parents a helping hand” as “a lot of hi-tech expensive toys have dominated the Christmas market,” stated John Hext, Tesco Toy Category Manager. Because Tesco toy experts believe that “there will be a return to basics with more all family-inclusive games,” the retailer has unveiled a list of top-ten toys in which more than half cost £15 ($20) or less. This will be the first holiday following the closure of the company’s online general merchandise operation, Tesco Direct; however, Tesco has maintained an online toy offering of more than 200 products on its grocery website.  

John Lewis: The top-toys list from John Lewis focuses heavily on activity and getting children moving and being outdoors. John Lewis Toy Buyer Harry Boughton said that the retailer has seen a growing demand for toys that encourage children to be active and so, the list this year includes a mix of retro and tech toys with several that prompt activity and movement. Boughton believes that the pocket-sized i-Top on the retailer’s list will be the most popular playground toy.


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