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Hot toys are 'recession-proof'

Many consumers are unwilling to cut back for Christmas toys

POSTED: December 6, 2008 5:00 a.m.

East Hall Middle School sixth-grader Austin McKenzie, 11, picks out Hot Wheels cars Wednesday at Target in Gainesville. The National Retail Federation has named Hot Wheels the No. 8 top toy for boys this year.

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In what could be the worst holiday shopping season for retailers in decades, there’s one thing that’s still sure to sell: Barbie dolls.

While high-tech, interactive gadgets and the latest version of the perennial "hot toy," Elmo, promise to move off store shelves, it’s the old standby from Mattel that debuted nearly 50 years ago that has made the top of this year’s top toys for girls list, compiled by the National Retail Federation from a national survey of likely toy shoppers.

For boys, video games, specifically for Nintendo’s Wii and Microsoft’s Xbox 360 consoles, remain just as in demand as they were a year ago.

"We still have trouble getting them," Joseph Furlow, owner of the Play N Trade video game store on Shallowford Road, said of the notoriously scarce Wii systems. On Wednesday, two days prior to the traditional start of the holiday shopping season, Furlow had one Wii system in stock.

While game systems and other hot toys for children can be expensive — the Wii starts at about $249, while Hasbro’s Kota the Triceratops retails for $300 — toys are among the last things that holiday shoppers will scrimp on, experts say.

"Toys are typically looked at as recession-resistant," said Kristy E. Reynolds, an associate professor of marketing at the University of Alabama who researches holiday shopping trends. "Parents are very reluctant to hold back on toy purchases for their kids."

Reynolds believes retail holiday sales could be at their lowest levels since the early 1980s, based on early economic indicators. But toy giants Mattel and Hasbro reported strong third-quarter earnings, she said.

The National Retail Federation predicts a "meager" holiday sales growth of 2.2 percent this year, compared with the 10-year average of 4.4 percent annually.

"Current economic pressures and a lack of confidence in the economy will force holiday shoppers to be very conservative with their holiday spending," the federation’s chief economist, Rosalind Wells, said. "We expect consumers to be frugal this season and less willing to splurge on discretionary items."

As a result, retailers will be scaling back their inventories in anticipation of a tough season, said National Retail Federation President and CEO Tracy Mullin.

"Parents are encouraged to shop early to ensure they are able to find specific toys," Mullin said. "The good news for parents is that many retailers are featuring toys as loss-leaders this year, heavily discounting and promoting these items to bring shoppers into stores."

Of the 8,758 people surveyed by the organization, 41.6 percent said they planned to purchase toys this Christmas season.

In addition to Barbie, other hot toys for girls as identified by the survey include Disney’s Hannah Montana, the Bratz and High School Musical products.

On the boys’ side, LEGO, Transformers, Hot Wheels and Star Wars items should be big sellers.


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