Toy stories: How two local toy stores are staying afloat during tough times for the industry

toy store

As the toy industry struggles with various post-pandemic challenges, leading to closures of such retailers as Mastermind Toys, local toy retailers are having their own ups and downs this holiday season. 

Tag Along Toys at 1500 Bank St. in the Blue Heron Mall has had a “fairly good” year, according to owner Patti Taggart. 

“It’s been fairly steady,” she said. “I have to say we’ve been fairly fortunate. Summer was a bit quieter than I would’ve liked and October was a bit down. But November started off really strong and December has been okay. It’s not gangbusters like I like it to be, but it’s right in the middle right now.”

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Over the past week or so, things have started to pick up, she said, adding that she anticipates a wave of last-minute panic shoppers to make an appearance this week as well. 

According to Taggart, a number of factors have made the store’s post-pandemic recovery a little bit easier. 

For one, she said many shoppers who frequent the Glebe for toy products have started discovering Tag Along Toys following the closure of the iconic retailer Mrs. Tiggy Winkle’s in 2020. 

“It made people realize that there are no other real local toy stores around anymore,” she said. “I hate that (Mrs. Tiggy Winkle’s) closed, but so many people have found us, especially in our neighbourhood, because so many people went to the Glebe store.”

Taggart has also taken to social media. Along with the online store she created last November, the added digital presence has given sales a good bump. 

It also allowed the store to expand its customer base. 

“I post a lot to Instagram and Facebook. I have so many people come in and ask about something I posted,” she said. 

“We’re getting a lot of people finding us online. On a Saturday, I posted one of our top toys, the Doctor Squish Maker Station, on Instagram and, no exaggeration, on Sunday I had 12 online sales from Toronto and beyond. The website has been really great for us.”

But the business is not without its challenges. 

According to Taggart, it’s difficult for a small store to compete with big-box retailers, especially when it comes to inventory. 

“We’re having to order things so much further in advance. I do a lot of my ordering in May, June, July for Christmas. Then I have all this stock and I’m wondering, is this trend still going to be around at Christmastime?” she said. 

“Keeping the store full is hard and you don’t always have extra cash flow through certain months of the year. We have to compete with big-box stores and we don’t always have the specific things that customers want. There’s a lot of things people request and we’ll put in an order in July and still be waiting in November. Sometimes I’ll put an order in and it won’t show up in time for Christmas.”

At hobby and collectibles store Toys on Fire in Nepean, it’s been a slow year as customers cut back on non-essential spending, according to store manager Grayson Doherty. 

“I guess we’re seeing it across the board,” he said. “Bank of Canada increasing interest rates, cost of living going crazy, stuff like that. People have less money for things like hobbies. That’s probably the biggest thing.”

According to Doherty, the store is still in good shape. He said he’s been careful with spending and avoided racking up debt. He’s also sitting on a nest egg to tide things over until business picks back up. 

Still, the difference this year has been noticeable.

“We started pretty small and we’ve been slowly growing over the last 17 or 18 years, year over year,” he said. “When the pandemic happened, pretty much across the entire industry we saw a huge bump. But in 2022, things slowed down and this year they’ve slowed down a lot. We’ve backtracked for years.”

Like Tag Along Toys, Toys on Fire also has a strong e-commerce presence. The website was set up when the business opened in 2005 and helped it stay afloat during the pandemic. 

But online business is also slow this year, Doherty said. 

“We’re seeing something similar online,” he said. “It’s down probably about the same percentage. The local traffic is as well.”

Still, Doherty said it helps to have a loyal customer base who are keen to support a locally owned business. 

“I’m optimistic that we’ll be able to get through this. Things are going to slowly get back to normal eventually, but it’s going to take a few years,” he said. 

“(People are) coming in to have fun. When they leave, they’re always happy. It’s a pretty positive place to be.”

Canada’s toy retailers say they’ve long been grappling with the same challenges that nearly killed Mastermind Toys and some fear this holiday season will be difficult as shoppers adopt more budget-conscious behaviours.

Shoppers’ dedication to seeking the lowest price is not new, but it is being exacerbated by high interest rates and inflation, which have shoppers thinking twice about some purchases and only making others if the price is right.

Though such patterns are being felt across most sectors, they’re an extra layer on top of the lengthy list of woes the toy industry faces: increasing competition, the rise of giants like Amazon, a slow recovery from the COVID-19 pandemic, more interest in second-hand goods, and a shift toward digital and experiential gifts.

It’s been a “tough” year for the entire toy market, said Jeff Bowes, toy industry analyst with market research firm Circana.

While the industry grew 30 per cent between 2019 and 2022 when people were at home during the pandemic and seeking entertainment, this year has been marked with declines.

“Three-quarters of Canadians are telling us they’re planning on cutting back spending due to inflation … and this figure is even higher among those under the age of 45, which is your core toy buyer,” he said.

When they are willing to purchase, some shoppers don’t step foot in a toy store. Walmart, Canadian Tire, Indigo Books & Music and Costco all sell toys, as do online behemoths such as Amazon and Temu.

Big toy companies have their struggles, too.

Toys “R” Us has been working to restore the brand to its former glory since 2017, when it filed for Chapter 11 bankruptcy in the U.S. It mostly operates through shops within Macy’s department stores now.

Toys “R” Us Canada — a separate entity — sought creditor protection around the same time as the U.S. business. It was eventually sold to Fairfax Financial Holdings Ltd. for $300 million and is now owned by Putman Investments, which is behind Everest Toys, Sunrise Records and HMV.

Putman was in talks to buy Canadian toy chain Mastermind, but the parties abandoned the purchase earlier this year, when regulatory approvals were taking too long to obtain.

Citing increased competition and trouble recovering from the pandemic, Mastermind filed for creditor protection in November and announced plans to close 18 stores. Unity Acquisitions Inc. later stepped in to buy the remaining business.

J.C. Williams Group retail strategist Lisa Hutcheson predicted much of the consumer spending will be done at big-box retailers this season.

“I think about the Walmarts and the Costcos because people are just going to shop those aisles because of convenience,” she said.

But she said there is still room for mom-and-pop shops, especially those offering screen-free toys.

With additional reporting from The Canadian Press

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