Father on laptop with child

Toy Supply May Be Lower This Holiday Season

Retailers, Toy Makers Race to Stock Up

Walmart (WMT), Target (TGT), and other retailers are racing to stock up on toys as strong demand and shipping delays threaten to leave store shelves emptier this holiday season. The inability to get toys to retailers ahead of the holidays because of logistics snafus also threatens profits for Mattel (MAT), Funko (FNKO), and other toymakers.

As it stands, the holidays are a big contributor to the toy industry’s $33 billion in annual sales. Spending during the 2021 holiday season is expected to be strong given pent-up demand after lockdowns last Christmas season. In the first seven months of this year, US imports of dolls, games, and toys doubled compared to 2019, hitting $1.88 billion per month. This marks a record for the industry.

Companies Get Creative With Logistics

To ensure toys reach store shelves in time for the holidays, toymakers are getting creative. Toy companies including Funko and MGA are routing shipments to less congested seaports, using cargo planes, and asking some retailers to figure out their own shipping.

Meanwhile, Walmart and Target have contracted their own ships and Macy’s (M) began placing orders for toys three months earlier than it typically would. The department store operator just announced a deal to open up Toys “R” Us sections in over 400 stores next year. Macy’s has already started selling some toys through this partnership.

Stock Is Okay For Now

Flying in products is costly for the toy manufacturers and retailers, but it can save precious time leading up to the holidays. Delays for cargo ships are lasting anywhere from days to months. However, toymakers are also facing difficulties with transporting products by air. For the first seven months of this year, shipments into the US via cargo planes were more than double what they were during the same period in 2019.

For now, stores are fully stocked with toys, but retailers will have a difficult time keeping that up as the holidays approach. Shipping disruptions due to COVID-19 outbreaks and overbooked cargo ships could prompt more delays in the coming weeks. If these trends keep up, some retailers could be in for a blue Christmas.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender