Lower-price toys lead back-to-basics trend - at discount stores

Discount Store News, Nov 21, 1988 by Richard C. Halverson

Lower-Price Toys Lead Back-to-Basics Trend

With one exception, prices on the five top-selling toys as the Christmas season prepares to shift into high gear fall into the $4 to $20 range.

The exception: the Nintendo Action Set, at about $99, has become the top toy hit of the year.

Nintendo expects to sell out production, with revenues exceeding $1 billion this year, a representative said, and many toy discounters also expect to sell out on the product before Christmas.

These items also appear most often on retailer lists of best sellers:

* Lil' Mis Make Up, from Mattel, $17.99 to $19.86;

* Color Hot Wheels, also Mattel, $3.99 to $4.97;

* Pictionary, from the Games Gang, $16.99 to $19.99;

* Micro Machines (miniature cars), Galoob, from $3.99.

In addition, retailers report these toys among their top sellers: Ghostbusters' Proton Pack, Kenner; Barbie Doll, Mattel; Teenage Mutant Ninja Turtles, Playmates; and Dolly Surprise, Playskool.

Shortages of the top sellers already are shaping up. Lionel Leisure, Philadelphia, is encountering "problems with supplies of all the top sellers," said chief operating officer Marvin J. Katz.

And Marc Langus, top buyer and principal of Toy & Sports Warehouse, White Plains, N.Y., predicted a "mass shortage of merchandise" for Christmas.

"Christmas will be wild," Langus said. "Customers will be scrambling from store to store to find popular toys." Chain buyers will be in a frenzy next month, he added.

Toy & Sports is having trouble keeping Nintendo in stock and expects to sell out by the end of the year, Langus said.

At the 14th Annual Morgan Stanley Retail Forum, held last month in New York, Toys "R" Us chairman Charles Lazarus said, "I see no end to Nintendo, and I hope it goes on forever."

"Most toys don't die out completely," he said. "IN fact, Toys "R" Us still sells 6,000 to 8,000 hula hoops a week.

Lionel Leisure, which operates most of its stores under the Kiddie City name, expects to sell out of Nintendo by mid-December, Katz said. Supplies were short last year as well, he said.

Given its popularity, prices for the Nintendo Action Set range by only 99 cents from $99 at Toys "R" Us and Lionel Leisure to $99.99 at K mart.

Nintendo has licensed a "tremendous amount of software," Katz said, and "kids want them all."

Lionel stocks almost all of the 100 or so video games that can be played on Nintendo.

Lazer Tag, Worlds of Wonder, is doing extremely well at a closeout price of $9.91, Katz said. Before it went on close-out two months ago, it was selling for $20.

On the high end, the best seller for Lionel is the radio-controlled Jeep from Power Wheels, which retails at about $160, Katz said.

Nintendo "absolutely will sell out," said a toy retail analyst who asked to remain anonymous.

Nintendo controls about 75 percent of the U.S. home video game market. Business Week recently ranked Nintendo, based in Kyoto, Japan, as No. 321 of the top 1,000 global companies.

Barbie Still an Old Favorite

Barbie also is having a good year, the analyst said. "It's an old product with tremendous staying power."

On ad, Toys & Sports is offering Lil' Miss Makeup at $17.99, the Pictionary game at $16.99, and the California Barbie Doll at $8.99.

Along with the top five on everybody's list, Child World also lists Coleco's Cabbage Patch toddler among its top 10 hot toys. Other items include: Dolly Surprise, Playskool; the New Medical Kit and Magic Scan Checkout, both from Fisher-Price; U.S.A. Racing Bike, Huffy; and hand-held electronic games, from Tiger.

In addition to the top five, K mart also is predicting that Pee Wee Herman figures, from $3.79 to $39, will be among its Christmas successes. Other items include: New Bright's Great American Train Set, at $48.97; and Playskool's Playsounds Sink and Stove, each at $68.93.

At Wareham, Mass.-based Tons of Toys, the Fisher-Price Schoolhouse, which sells for $29.99, is doing well, said Raymond Ferretti, vice president, merchandising.

LEGO sets are also popular. "We can't keep them on the shelf," he said. Tons of Toys carries 30 to 40 LEGO sets, most of them under $50.

Although it's too early to project any figures for Christmas gains, 1988 is shaping up as a "basic, good year" for toy specialists, Ferretti said. "It's not quite that wonderful" for toys in full-line discount stores, he added.