Small toy stores fear they will not stay in business after this year

About a quarter of Pufferbellies’ annual sales are between Thanksgiving and Christmas, when shoppers, she said, “come out of the woods” to buy Legos, snow globes, puzzles, playing cards, stuffed animals and other gifts for their family and friends.

But Blanton, who runs the store with her mother and has five employees, is more concerned about this holiday season than she has ever been in Pufferbellies’ 15 years of activity.

Sales are limited by restrictions on the number of customers allowed inside its 1,900 square foot store at a time during the pandemic – Blanton puts a flamingo outside the store when it is at full capacity . Pufferbellies can’t hold holiday events in the store this year, a key sales driver, and some of its vendors tell it they’re late because they can’t staff their own warehouses at regular levels. Before the pandemic, Pufferbellies had play tables and toys for children to try out, but these are now put away.

The pandemic restrictions have taken their toll on small toy retailers because “they just don’t have room to have people in. [stores] with a social distancing of six feet, ”said Sue Warfield, interim president of the American Specialty Toy Retailing Association, which represents more than 1,800 independent retailers and manufacturers in the toy industry.

Pufferbellies have also had to contend with rising costs related to the coronavirus, including installing acrylic glass barriers at cash registers, purchasing additional hand sanitizer, and hiring an employee to enforce customer limits in the store. .

And then there is growing competition from Amazon (AMZN) and big box chains such as Walmart (WMT), Target (TGT), Costco (COST). These businesses have remained open throughout the pandemic, even though small toy stores were forced to close in the spring.

“I don’t have the tech resources of department stores or Amazon,” Blanton said. “I don’t have the ability to make a super easy to use app. We don’t have an IT department. We don’t have a delivery company. Our website is a bit clunky.”

While small toy stores like Pufferbellies struggle to stay afloat during the pandemic, sales from Amazon and large chain stores have increased as shoppers head online and consolidate store visits. Analysts predict an exceptional holiday season for these companies.

In contrast, the situation is particularly dire for independent toy retailers. Sales at toy, hobby and game stores fell 26% between mid-March, when closures first began, and the end of October compared to the same period last year, according to data from Womply, a company that provides software platforms for small businesses and tracks sales. through credit and debit card transactions.

The struggles for small toy stores came even as toy sales rose 19% through September, according to market research firm NPD Group. Toys and puzzles have been in high demand as parents and children are spending more time at home and looking for ways to be entertained during the pandemic. But the benefits go to Amazon and the big box chains.

Stephanie Wissink, a retail analyst who covers the toy industry at Jefferies, points out that young parents who buy toys for their children today “have grown up in a world where everything is available to them” on Amazon.

Additionally, Toys ‘R’ Us filing for bankruptcy in 2017 and the shutdown of FAO Schwarz prompted Amazon and big box chains to build up their toy inventories in an attempt to take market share from these companies.

“It was like confetti in the air,” Wissink said.

This holiday season is likely to widen the gap between large chains and small toy stores, according to retail experts.

Nearly half of the 1,800 independent toy and gift shop owners surveyed between Sept. 19 and Oct. 27 by Alignable, a small business social networking company, say they fear they won’t earn enough during the season. Parties to stay in business this year. Another 36% of respondents said they would earn just enough this holiday season to get by.

Elle Dare, who runs Genuine Toy Company, a toy store in Plymouth, Michigan that has a retro vibe and plays themed songs from old TV shows like “Leave it to Beaver” and “Saved by the Bell,” hopes bring enough cash on this holiday to pay suppliers and pay the rent.

“If we can just pay the bills I think we can get by,” she said. But Dare worries about ordering too many toys over the holidays and carrying leftover inventory. It is also bracing for new restrictions on retailers following the recent spike in coronavirus cases, which would hurt sales and make it impossible to pay its suppliers.

She hopes the struggles of independent stores like Genuine Toy Company during the pandemic will galvanize shoppers to buy local on the holiday.

“People are realizing that if they want their local businesses to be close, they are going to have to support them, especially during difficult times.”