The NPD Group reported that U.S. retail sales of toys generated $29.2 billion in 2022, a decrease of 0.2 percent.
Unit sales declined by 4 percent, and the average selling price of $12.68 was 3 percent higher than in 2021. While sales remained relatively flat in 2022, the market grew over the last three years, including a 14 percent growth in 2021 and a 17 percent growth in 2020.
The U.S. toy industry growth contributed to a three-year compound annual growth rate (CAGR) of 10 percent, driven by an average selling price (ASP) growth of 8 percent and unit sales growth of 2 percent.
2022 came with challenges—double-digit increases in food prices, rising interest rates, weather disruptions, new COVID variants, and reinfections—making for shopping hurdles that contributed to the muted holiday season for the U.S. toy industry.
According to NPD’s data, dollar sales decreased by 5 percent or $628 million in the fourth quarter. Unit sales also declined by 5 percent while ASP remained flat.
“After three record-breaking years for the toy industry, 2022 was a challenging year. U.S. consumers were forced to endure significant economic headwinds stemming from inflation and adverse macroeconomic factors,” said Juli Lennett, vice president and toy industry advisor at The NPD Group. “While these headwinds certainly impacted overall consumer behavior, the toy industry still managed to finish the year on a positive note as spending kept pace with the previous high-water mark of 2021.”
Looking at supercategory performance, four of the 11 supercategories tracked by NPD posted growth in 2022. Compared to 2019, nine posted a positive three-year CAGR. Outdoor and sports toys continued to be the largest supercategory, with $5.2 billion in sales in 2022; however, it had the largest dollar sales decline of all toy supercategories, falling 11 percent year-over-year, accounting for 18 percent of dollar sales for toys in 2022 and 52 percent of annual sales declines.
Plush toys had the largest dollar gain of $547 million and the fastest dollar growth, rising 31 percent, followed by explorative and other toys, which grew 16 percent, year-over-year. Looking at the CAGR compared to 2019, plush had the fastest growth of 23 percent, followed by explorative and other toys at 22 percent. Dolls had a flat three-year CAGR, while youth electronics declined one percent.
The top toys in 2022 were Pokémon, Barbie, Marvel, Star Wars, Squishmallows, Fisher-Price, Hot Wheels, LOL Surprise!, LEGO Star Wars, and Melissa & Doug. Collectively the toys grew 7 percent, while the rest of the market declined by 2 percent.
“Like last year, 2023 will bring about bright moments and deep groans. With a more significant theatrical calendar this year compared to the last three years, the U.S. toy industry will be poised to enjoy the fruits of several tentpole movies,” said Lennett. “However, if inflation and other adverse macroeconomic factors linger later in the year or become worse, we can expect to see families pulling back on the number of toys they purchase or trading down to lower price points.”
