Price inflation is about to hit toys — just in time for the holidays
Cash-strapped parents had better brace for rising toy prices this holiday season — and the hikes could be significant, the two biggest toy manufacturers warned this week.
Ynon Kreiz, chief executive of Barbie maker Mattel, said on an earnings call this week that the El Segundo, Calif.-based company is “managing through global supply chain challenges” that include higher production and shipping costs that will result in higher prices in the second half of the year.
Pawtucket, RI-based Hasbro, which makes Monopoly and GI Joe, also flagged freight costs as a chief reasons for the price increases that will go into effect in the second half, according to chief executive Brian Goldner.
The companies didn’t say by how much prices will go up, but toy experts say a double-digit increase is likely coming.
“The CEOs with whom I have spoken anticipate price increases in the 25 percent range,” Richard Gottlieb, head of Global Toy Experts, told The Post, adding that his conversations have been with both public and privately held companies.
Most of the price increases will be on brand-new products, including toys tied to new movies, according to BMO analyst Gerrick Johnson.
“That’s the easiest way to sneak price increases through,” he told The Post.
New merchandise, however, represents about 70 percent of the toy aisle, while classic items like Monopoly, Lincoln Logs or Matchbox cars are less likely to go up in price, according to Johnson.
Both companies are experiencing huge demand for their products, with Hasbro’s sales increasing by 54 percent in the latest quarter and Mattel’s by 40 percent over the same period.
But many toys are stuck overseas at factory warehouses, as The Post reported, because of a shipping container shortage and soaring freight costs.
Charitable organizations are also bracing for sticker shock.
Toys for Tots in New York, Long Island and Puerto Rico, launched its toy drive in July instead of November for the first time ever, Brock Pierce, vice chair of the organization told The Post.
“More expensive toys could mean fewer toys donated, and quicker-depleted funding streams,” Brock said. “We expect that this year will bring record demand for local children, given economic uncertainty and hardship caused by the pandemic.