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Companies in this industry operate physical retail stores that sell new toys, games, and hobby and craft supplies; some also sell products online. Major companies include Toys "R" Us, GameStop, Michaels, Hobby Lobby, and AC Moore Arts & Crafts (all based in the US), as well as Citta del Sole (Italy), Hamleys (UK), LEGO Group (Denmark), and Toyworld (Australia).
The global toy market generates more than $85 billion in annual revenue, according to the NPD Group. Areas of growth include China and India, where rising disposable income is driving increased demand.
The US toy and hobby store industry includes about 8,200 stores with combined annual revenue of about $20 billion.
Consumer spending is a key driver of demand for toy and hobby stores. In addition, population growth among young children (under 12) drives demand for toy stores, and population growth among women 35 and older drives demand for hobby stores. The profitability of individual companies depends on the ability to generate store traffic and effective merchandising. Large companies offer wide selections and deep discounts. Small companies can compete effectively by offering specialized products, providing superior customer service, or serving a local market. The US industry is highly concentrated: the top 50 companies generate about 85% of revenue.
Toy and hobby stores compete with mass merchandisers. Toy retailers also compete with consumer electronics stores, due to the increasing popularity of ...
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