PDA

View Full Version : Toy companies strike back against wal-mart!!



Jedi_Master_Guyute
02-14-2004, 11:05 AM
This article is running in today's issue of the dayton daily news (though it's dated from yesterday from the AP). I'll paste the text and then link to the article, if anybody really wants it.

Exclusive deals ahead to push lines
Manufacturers plan fewer hot toys for Wal-Mart shelves

By Anne D'Innocenzio
Associated Press

Friday, February 13, 2004


NEW YORK -- Led by Wal-Mart Stores Inc., discount retailers won a war with other toy stores this past holiday season. Now toymakers, a casualty in that bitter fight, have decided to make their own stand.

To protect themselves and toy retailers they see as key to their profits, some manufacturers plan to deliver fewer hot toys to Wal-Mart and to have more exclusive launches at chains like Toys "R" Us Inc. It's a rare instance of manufacturers challenging the biggest U.S. retail juggernaut and its low-price approach to business.

Wild Planet Toys' Aquapets, an interactive critter, will be at Toys "R" Us exclusively for three months this spring before it reaches the mass merchants.

"The success of Toys 'R' Us is important for the health of the toy industry," said Danny Grossman, founder and CEO of Wild Planet.

Said Jim Silver, publisher of the Toy Book, an industry magazine: "Wal-Mart is a very important part of the toy business, but toymakers don't want its low-pricing strategies to devalue their brands and their business — and put more toy retailers out of business."

The price wars contributed to the bankruptcies last holiday season of FAO Inc., owner of the famed FAO Schwarz, and KB Toys Inc., which plans to close nearly a third of its stores.

"Whether it is exclusive launches or controlled product shipments, they are going to do whatever they can to keep other retailers healthy," Silver said.

Still, given the clout of Wal-Mart, which has a 21 percent share of the toy market, it remains to be seen whether these strategies will be effective. Many manufacturers— who wanted to speak anonymously for fear of losing the discounter's business — said there is only so much they can do. Setting prices with retailers is illegal under antitrust laws.

And Karen Burk, a Wal-Mart spokeswoman, said: "Our focus will continue to be what it has always been, and that is delivering value to our customers, and that will not change."

The pricing issue is expected to be a key concern of manufacturers and retailers at the American International Toy Fair, the industry product expo that officially begins Sunday.

Toy price wars have always been part of the holiday season, but 2003 was even more brutal than expected. In September, Wal-Mart started by dramatically reducing prices on more than a dozen hot toys, six weeks earlier than usual.

The retailer sold Mattel's Hot Wheels T-Wrecks playset for $29.74 instead of the original $49.88, while the price of Play Along's Sing-Along Care Bears fell to $14.99 from $24.99.

Wal-Mart used the toys as a loss leader to woo shoppers to other aisles elsewhere in the store.

Discount rivals including Target Corp. followed, but other stores that could not compete ended up canceling orders and advertisements.

Manufacturers are worried about 2004. "This sets the bar this year," moaned Jay Foreman, CEO of Play Along.

The $20 billion traditional toy industry suffered a 3 percent decline in sales last year, according to analyst estimates. Meanwhile, prices fell 4.3 percent on top of a 9.3 percent decline in 2002, according to the Labor Department.

Some companies like Applause LLC are determined to create a best seller even without discounters' help. The toy company, which limits its distribution to independent stores and specialty chains, is reintroducing Dream Pets, fuzzy animals originally brought to the United States in the 1950s from Japan.

"I believe that phenomenons can happen today without mass merchants," said Bob Solomon, chairman of the Woodland Hills, Calif., company.

*end article*

This seems to be a pretty interesting strategy on the part of toymakers and whatnot. It should be interesting to see if any of this works and i'm kinda happy about it, as i'm not a big fan of wal-mart as it is. Cheers!! :D

JediTricks
02-14-2004, 12:03 PM
Yeah, I saw that on yahoo news yesterday from our TF affiliate site, I was thinking of putting it in the SSG news even though it doesn't mention Hasbro or SW. I think it's probably a good thing, WM needs to have their power taken down a peg if they are willing to screw up the industry that badly. If they want to offer cheaper toys that hamper the way other stores get product, then they SHOULDN'T be new, let WM suffer like KB.

Kidhuman
02-14-2004, 12:08 PM
Well that sucks since I use Wal-MArt for most of my shopping. Hasbro better not do this with SW figures. I would be highly disappointed.

Its not Wal-MArts fault if other stores can not compete with their prices. As long as it is not SW toys, I could care less.

kool-aid killer
02-14-2004, 02:57 PM
I seen the article in my paper too. So i guess is TRU having the four packs an example of Hasbro giving Walmart the shaft or do retailers get the chance to pick up something that will be exclusive to their stores from the Star Wars line?

JediTricks
02-14-2004, 04:13 PM
kidhuman, did you see the part about how WM is using these toys as loss-leaders (priced under cost to entice customers to buy from other departments) and how this sometimes devalues the toys themselves? I wouldn't want to see WM's current business practices devalue SW... not that WMs in my area ever have SW anymore anyway, but still. When they do that, it seems to me like market manipulation, using their huge customer base and buying power to strongarm toymakers and damage other toy retailers' ability to sell the product without taking a loss.


KAK, I don't think that's what those TRU 4packs are about, TRU and Hasbro have been doing those 4packs in various Hasbro lines for years, it's not related to this current "avoid WM" trend I think.

El Chuxter
02-14-2004, 04:23 PM
Wasn't the 20th Anniversary Prime supposedly going to be a TRU exclusive for a few months, then (my guesswork here) they flaked out because of the massive amount of shelf space kept toasty and warm by those overpriced plasticy G1 reissues?

And yet, I got mine at Wal-Mart and have seen one more there and two at Target. A friend of mine got one at Target. I've heard of none at TRU.

Mixed feelings on this article. On the one hand (and my conscience tells me this one is the right one), Wal-Mart is the Devil. Seriously. I think it says so in the Book of Revelation. Anything to bring them down a notch or two and restore free enterprise to this once capitalistic country is a good thing.

On the other hand--the one I actually buy toys with--of the Star Wars, Transformers, LOTR, Batman, Marvel Legends, X-Men Classics, Hulk, and GIJoe toys I've bought in the past year, I'd wager that upwards of 90% were from Wal-Mart. Aside from being cheaper, they've tended toward getting more stock, having it on the shelves in a timely fashion, and the entire "open before I have to be chained to a desk" thing has made it much easier to get stuff there.

Hmmm. Do I side with my morals or my collection?

Kidhuman
02-14-2004, 04:32 PM
kidhuman, did you see the part about how WM is using these toys as loss-leaders (priced under cost to entice customers to buy from other departments) and how this sometimes devalues the toys themselves? I wouldn't want to see WM's current business practices devalue SW... not that WMs in my area ever have SW anymore anyway, but still. When they do that, it seems to me like market manipulation, using their huge customer base and buying power to strongarm toymakers and damage other toy retailers' ability to sell the product without taking a loss.


KAK, I don't think that's what those TRU 4packs are about, TRU and Hasbro have been doing those 4packs in various Hasbro lines for years, it's not related to this current "avoid WM" trend I think.

I saw that, but in my case, I have 2 Wal-MArts and a Target that I use to get most of my stuff at. Target hardly has anything while Wal-Mart has most of it. In the 3 years I have been living in Va. Wal-Mart has gotten 98% of my toy business. The closest TRU is 45-60 minutes away and if there is traffic it could take 2 hours. The KB is closing down, but the newest thing they had was Orn Fre-Ta. I only bought a four pack at KB and it was one that they let me make myself.

I agree that Wal-Mart is devaluing them, but it is my source for SW toys. I cant help that fact.

El Chuxter
02-14-2004, 04:48 PM
That's how my left hand is. :) I used to live in roughly the same area that kidhuman lives in now (though five miles from the TRU in question). The KB there is closing down as well, and the TRU is generally pretty bad.

Which leaves folks in that city (I won't name it to preserve KH's anonymity, but anyone there will be able to figure it out) with one Target (usually pretty good--I got all the EU figures there with no problem back in the day), one comic shop that sells overpriced toys, three K-Marts (useless for collectors, as they all are). . . and three Super Wal-Marts in town with another four within 45 miles of the city limits!

Wally World is taking over the world! They run everyone out of business, and we're almost powerless to stop them if we want to actually get toys! :mad:

Even in southern Cali, where I am, most of my toy business goes to WM by necessity. KB rarely has anything at the 40 or so stores nearby (none of them closing, oddly enough). There are two nearby TRUs, both of which are hit and miss for anything. The five Targets I frequent are generally pretty good about having stuff, but with really long dry spells between restocks. And Wal-Mart, with only three stores within convenient driving distance, typically gets the stuff first. When I see Ephant Mon or 20th Anniversary Oppie or SA Clonetrooper on the shelf, the part of me screaming to not give these corporate vampires any money becomes completely submerged under the "omigod, if I don't get this, I'll never see it again!"

I can't afford to pay twice retail for everything (or even a small portion of my collection), and unfortunately the devil is the only one able to supply the goods.

But maybe it's not all bad. I mean, Robert Johnson made a deal with Wal-Mart at the crossroads years ago, and he learned to play the guitar better than anyone else who ever lived. :crazed:

Banthaholic
02-14-2004, 06:18 PM
Wal-mart's practices of loss-leading is definitely a problem, for other area stores. As much as some don't get in new stuff constantly, it's nice to have for selection, exclusives, etc..
Wal-mart showed their 'abilities' last year when they passed on deluxe, screen scenes, vehicles, etc... I avoid them, like the plague, except for SW stuff, no groceries, no houseehold items, no electronics. I don't want to contribute to them being able to close down other area businesses that did carry these products.
Heck, I'm sure wal-mart will overbuy E3 products, and will warm pegs on some. I'd hate to have them decide to pass on future SW products, that could lead to the ultimate demise of the line.

Kidhuman
02-14-2004, 07:52 PM
That's how my left hand is. :) I used to live in roughly the same area that kidhuman lives in now (though five miles from the TRU in question). The KB there is closing down as well, and the TRU is generally pretty bad.

Which leaves folks in that city (I won't name it to preserve KH's anonymity, but anyone there will be able to figure it out) with one Target (usually pretty good--I got all the EU figures there with no problem back in the day), one comic shop that sells overpriced toys, three K-Marts (useless for collectors, as they all are). . . and three Super Wal-Marts in town with another four within 45 miles of the city limits!

If I'm the left hand, I sure hope your a righty :D

Well they have since closed 1 K-mart here since you left. The only one left is in C-Burg, but I rarely go to it. The Wal-MArt on 460 and the one on 114, as well as the Target on 460 is all we really have left here. KB in the NRV is closing, and the one in Roanoke. If I was feeling adventurous, I could drive to Pulaski Wally WOrld or make a trip to Roanoke to go to that Wal-MArt, Target and TRU, while hitting Salem along the way. But with the lack of figs every time Ihave been in those stores, I would hate to waste gas money. If I do need to go up that way, I do stop there, but it is usually the same old Slim Pickin's as down here.

Lowly Bantha Cleaner
02-14-2004, 11:41 PM
Good to see the toymakers stand up to the immense power that Wal-Mart yields as a retailer. There is a crux when it comes to selling toys to Wal-Mart. You know you will sell a lot of units as they have thousands of stores worldwide, but you know your profit margin will be small as Wal-Mart will sell your product much lower than anyone else. Toymakers saw that they are losing in this situation so they counteracted the juggernaut. Time will tell if this will work.

You can see my earlier rantings against Wal-Mart and their practices in the KB thread in the Saga forum. Is Your KB Closing? (http://www.sirstevesguide.com/forums/showthread.php?t=22925&page=3&pp=10)

As Chuxter pointed out there is a dilemma that arises. Many of us get our figures from Wal-Mart but do we want to support the "evil empire" and their retail tactics by continuing to buy our SW products from them. Wal-Mart is about three miles away from my house and the nearest retailer that sells Star Wars figures is a Target about 18 miles away.

Personally, where I live, we were a town with an Ames and K-Mart that thrived for over two decades. When Wal-Mart came in, those two stores hung on for dear life but eventually sucummbed. Now we just lost our only mall which had been open since the late 1970's and the number one reason that many people gave for the demise was Wal-Mart. (Ironically, the mall site is being proposed as a place for a Super Wal-Mart). The only other retail stores that will survive in my town are now Dollar Generals, Save-A-Lots, Dollar Trees, Family Dollars, Family Generals' Save-A-Tree Dollar Store, cheapy type stores that offer low quality goods. All the residents who don't normally frequent those stores go elsewhere to shop and only the thrifty shoppers of the city will hit them. This is a drain on the local economy.

Kidhuman
02-15-2004, 01:26 AM
No matter where you spend your money, it helps the economy of the entire area. Weather it is Wal-Mart, Dollar Tree, or Bag-o-Donuts. Why are people grping when Wal-Mart offers the lowest prices? Its for toys. Stuff that not everyone sells. SUre Wal-Mart offers low prices, but hey, wouldnt you if you owned a chain of stores and could afford to buy that much bulk?

SO, they have a cornerstone on the market. Is it their fault? NO. The consumer, who opts to shop there is at fault. WHy should I go to a KB when they are 6.99 a figure and Wal-Mart is 2 bucks and change cheaper? Sompelace like Target, which is only a 22 cent difference, I could care less, it wont make or break me. I couldn't even tell you what TRU is charging because I havent bought a figure there in almost 2 years. Even K-Mart at 5.49-5.99 is outrageous IMO.

Sending a toy to TRU for threre months isnt going to help things, unless it happens to be at X-mas. ANd even at that point I doubt a company woiuld do that. I will wait the three months to get it at a cheaper price. Heck, there is always Ebay as well. And either way, I do not think this will affect action figures. We will still be able to buy at our local stores once this all blows over.

mabudonicus
02-15-2004, 09:56 AM
KH- if it came down to actual informed choice it wouldn't be a problem ;)

Manipulation of a system is NOT "suceeding under the conditions established by the system".. it is cheating, and it seems that the main gripe about WM is that they're cheating both consumers and suppliers, as is totally proven by several reputable sources.
This thread even shows, by the mention of how wal-mart is the only remaining choice in many places.... honestly, do they offer the best quality goods???
I've been over the river/border to where LBC is from, sorta, and it is TOTALLY hurting there... we used to shop there when I was young, and it is really "bad" there now....

And people are largely ignorant because people aren't allowed to discuss these issues where they could be dealt with, as shown by adbusters attempt to air a 30 second spot this year just before "buy nothing day".
Really, it has nothing to do with offering the best service, at least not to society as a whole, look at their recent labour scandal, not the kind of thing a pillar of society should be tangled up in really.... maybe they are just totally unbounded by scruples...

Notice how cheap the materials used to make SW figures has become??? Hmmmm.... maybe hasbro is trying to offer the best "quality" that the market will support, and if the market is no longer competetive, it doesn't matter HOW crummy the product is, if you want it, you'll buy it.

Permission granted to "fix" this post :D

And no offense intended at all to anyone, to be sure, devil-mart is crafty

Kidhuman
02-15-2004, 11:43 AM
KH- if it came down to actual informed choice it wouldn't be a problem ;)

Manipulation of a system is NOT "suceeding under the conditions established by the system".. it is cheating, and it seems that the main gripe about WM is that they're cheating both consumers and suppliers, as is totally proven by several reputable sources.
This thread even shows, by the mention of how wal-mart is the only remaining choice in many places.... honestly, do they offer the best quality goods???
I've been over the river/border to where LBC is from, sorta, and it is TOTALLY hurting there... we used to shop there when I was young, and it is really "bad" there now....

And people are largely ignorant because people aren't allowed to discuss these issues where they could be dealt with, as shown by adbusters attempt to air a 30 second spot this year just before "buy nothing day".
Really, it has nothing to do with offering the best service, at least not to society as a whole, look at their recent labour scandal, not the kind of thing a pillar of society should be tangled up in really.... maybe they are just totally unbounded by scruples...

Notice how cheap the materials used to make SW figures has become??? Hmmmm.... maybe hasbro is trying to offer the best "quality" that the market will support, and if the market is no longer competetive, it doesn't matter HOW crummy the product is, if you want it, you'll buy it.

Permission granted to "fix" this post :D

And no offense intended at all to anyone, to be sure, devil-mart is crafty

Do you honestly think that shipping a toy to TRU three months early is gonna stop Wal-MArt? When people see the word "exclusive" they think one thing. A jacked up price. I'd say 60% of the people will lookelsewhere including online at Walmart's website. If Wal-Mart is smart, they will have a pre orrder for the item. Most people being frugile(sp?) will wait the three months or pre-order it. I hate to say this about Wal-Mart...............you can't stop em, you can only hope to contain them.

JediTricks
02-15-2004, 02:36 PM
If TRU got SW figures 3 months before WM and in ample supply, you bet your sweet bippy I'd be shopping there more often and WM would see less and less of my business. It defeats the point of loss-leading when a product is simply not available. The only reason I ever shopped at WM & Target in the first place was specifically because of action figures, which led to my using them for regular household items and other shopping needs, and I convinced at least a dozen people I know to give those stores a try - many of which became regular customers. Over the years, WM's practices have become distasteful, their stores dirty and dingier, their employee base of a lower quality, and their stores are fairly far away; while Target has built several closer stores, hired a fairly decent quality level of employee, and has offered similar, superior, or the same products usually at reasonable prices that are close to or sometimes lower than WM. In the past 3 years, I've unconciously switched from WM to Target for many of those reasons. So as you can see, the ability to have action figure product I wanted at that time definitely got my business and got me to get other customers in the stores - without that product, WM would have had less clients over the past decade especially if the people I told about WM told others about it as well.

plasticfetish
02-15-2004, 06:46 PM
"Exclusive deals ahead to push lines
Manufacturers plan fewer hot toys for Wal-Mart shelves"

You know the idea's all well and good, but it seems that maybe they'll need more than just "Wild Planet Toys" and "Applause" to jump on this to make it work. Kind of a lame article with no real substance I think... kind of a stretch saying "manufacturers" when they only mention two, and the rest or the article is mostly about Wal-Mart undercutting their competition rather than the stated topic. I'll bash Wal-Mart with the best of them, but only when it's constructive, and only when I think the "victims" are worth defending. FAO and KB deserve the hard luck that they've had... TRU also. Less animatronic giraffes, and more clean stores neatly stocked with a decent variety of good toys please!

Time to stop complaining, and start competing.

Darth Jax
02-17-2004, 10:02 PM
i'd rather pay wallyworld a little more and let them offer a fair wage and benefits to their employees, than have them undersell all their competition and drive them out of business. i've stopped shopping at wal-mart and give all my money to target for household goods. toys i'll get wherever i can find 'em (KB,TRU,target,etc) but NOT from WM. last couple of times i was in WM their SW pegs were completely empty anyway.