Toy prices are set to soar over the next few months ahead of Christmas and into the new year with some businesses saying they are already having to charge more.
Families have been warned to start shopping for Christmas now amid cost pressures from rising transport costs, higher energy prices and ongoing labour shortages.
The Toy Retailers Association warns shipping costs have risen 900 per cent in a year, with a £15 toy truck now costing £7 to ship from the Far East, up from 70p a year ago.
And the British Retail Consortium said today that there were ‘clear signs’ that the combination of problems were ‘starting to filter through to consumer prices’ as it said one in three retailers in the UK expect prices to rise in the next three months
One educational toys firm based in Shropshire said it had been ‘hit with increases from every angle – from higher cost of goods, to additional delivery surcharges’.
And a children’s publishing business in Bristol told how by the new year it will ‘have no choice but to adjust prices to accommodate ever increasing material costs’.
However a learning products company based in Milton Keynes said it would ‘like to increase our product prices’ but it cannot because it doesn’t want to lose customers.
The Bank of England has already flagged that inflation could hit 4 per cent by the end of the year, while supermarkets say food prices could increase by 5 per cent.
Alan Simpson, chairman of the Toy Retailers Association, told MailOnline today: ‘It is inevitable that prices are going to rise given the extra costs being incurred by retailers due to exorbitant rises in shipping costs.
People out stocking up ahead of Christmas at a Smyths toy shop in Slough, Berkshire, today
A woman pushes a trolley out of a Smyths toy shop in Slough, Berkshire, this morning
Shoppers look at products in a Smyths toy store in Slough, Berkshire, this morning
‘The large majority of toys are manufactured in the Far East and we have seen freight rates rise beyond belief – in some cases we are paying 10 times what it costs to ship a container now compared to 12 months ago.
‘Suppliers simply cannot absorb this level of increase and price rises are an inevitability. This anomaly is not confined to toys and can be expected to filter through all retail sectors whose product line originates in the Far East.
Black Friday shoppers fear transport problems will hit stocks
Around one in four people are concerned that items they may want to buy on Black Friday could be out of stock due to transport problems, according to a survey.
Some 26% of people questioned by YouGov said they are worried that the products they hope to purchase during the discount shopping event on November 26 will not be for sale due to the lorry drivers crisis.
Young adults aged 18 to 24 were found to be the most concerned, with just over two-fifths (42%) agreeing, according to the poll of more than 2,100 people across the UK carried out between October 8 and 11.
More than half (61%) of the respondents said they are still shopping online more than they did before the coronavirus pandemic.
Comparison website PriceRunner, which commissioned the research, said its own analysis of more than 12,000 products sold on Black Friday last year found that prices for around one in five had been ramped up and then reduced in time for the sale.
‘This is simply beyond the control of retailers here in the UK and we are at the mercy of several outside factors.’
Mr Simpson, who is managing director of Toytown, a chain of independent retailers based in Belfast, told BBC News about the example of a toy construction truck.
It now costs £7 to ship, compared to 70p in October 2020. The toy currently sells at his Toytown stores for £15, but he said the price will have to rise soon.
Mr Simpson added: ‘Come January, all suppliers are going to have to increase prices again, having [already] increased them in June, July and August this year.’
Andrew Opie, director of food and sustainability at the British Retail Consortium, told MailOnline today: ‘There are clear signs that the cost pressures from rising transport costs, higher energy and commodity prices, and ongoing labour shortages, all of which are starting to filter through to consumer prices.
‘A survey of retailers showed that three in five expected prices to go up over the next three months.
‘Government can reduce some of these cost pressures in the near term is by expanding the size and scope of the new visa scheme, so that labour shortages throughout the supply chain can be filled while new British workers are trained.’
Small businesses owners said they are already having to increase prices, including Nathan Le-Moine, director of Telford-based educational toys firm Kiddie Kin.
He told MailOnline today: ‘Reluctantly, we have already been forced into implementing price increases for our customers.
‘As with many online retailers, we have been hit with increases from every angle – from higher cost of goods, to additional delivery surcharges. The balance between protecting profits and remaining competitive is becoming a real concern.’
Ruth Bradford, owner of the Little Black & White Book Project publishing firm in Bristol, told MailOnline: ‘I’m desperately holding off from being a Christmas grinch and keeping everything the same.
Ruth Bradford, owner of the Little Black & White Book Project publishing firm in Bristol, said she’s ‘desperately holding off from being a Christmas grinch and keeping everything the same’
The headline CPI rate of inflation hit 3.2 per cent in August and is expected to rise further
The Bank of England expects inflation to be above its August forecast (pictured) – rising higher than 4 per cent this year and potentially staying there until the second quarter of 2022
‘But come the new year it’ll be less about resolutions and more about resignation as I’ll have no choice but to adjust prices to accommodate ever increasing material costs. For now, I don’t want to give shoppers even more reasons not to buy in an already tough market.’
Hamleys unveils most wanted Christmas toys
Toys that encourage imagination in children are tipped to be top sellers this Christmas as parents seek to counter a ‘year on screens’, retailer Hamleys has said.
This year sees the most-wanted toys encouraging role play and creativity and allowing families to play together after last year’s Covid-restricted celebrations, the store said.
The top 10 list includes racing cars, traditional family board games, Playmobil and Lego and the LOL! Movie Magic Dolls, which allow children to play with friends and create their own story lines.
Lego’s Super Mario Adventures with Luigi Starter Course encourages children to team up for real-life social play, while those with dreams of travelling again can turn to the Playshifu AR Globe with interactive and education cultural information.
The annual Hamleys toy predictions come as retailers suggested people who know what their children want this year consider buying early, amid concerns that supply chain issues could lead to some shortages ahead of Christmas.
Hamleys predicted top 10 toys this year are:
- Playmobil City Action Police Special Operations Police Robot, £20
- Shifu Orboot (Earth): The Educational AR Globe, £50
- Magic Mixies Cauldron, £70
- Mattel – Barbie Dream House, £310
- LOL Surprise Movie Magic Doll, £11
- Ralleyz Warrior 3 in 1 RC, £90
- Lego Super Mario Adventures Luigi Starter Course, £50
- Hasbro Nerf Elite Flip 2.0 8, £25
- Huggables Range, £20
- Hamleys Dicii Snakes and Ladders, £14
But Keisha Shah, founder of learning products firm Teddo Play based in Milton Keynes, told MailOnline: ‘A classic example of ‘having all eggs in one basket’. Covid has uncovered many flaws in our economic system.
‘With a majority of the countries outsourcing manufacturing activities to China, we are seeing a domino effect at the moment on an enormous scale. Rising manufacturing costs, supply chain issues, delays, not enough inventory to sell during the busiest time of the year, the list is pretty extensive.
‘We have remained fully designed and manufactured in the UK so we’re not as badly affected but the rising cost of materials is inevitable.
‘Being a small business, as much as we’d like to increase our product prices to cover these rising costs, it’s just way too much at stake, so the only option we have at the moment is to absorb the costs in the hope to retain our customer base.’
And Craig Bunting, co-founder of BEAR, a Derby-based independent coffee brand, said: ‘Price increases are always a contentious topic, but in reality, they shouldn’t be.
‘Brands are businesses, whether purpose-driven or not it is still business and pricing needs to reflect the true costs to ensure that the entire thing remains financially able to deliver its products, services and purpose.
‘We will be working on pricing increases between now and Christmas, and probably into the new year as we begin to rebalance our model to reflect where the market is right now.
‘The focus isn’t to increase prices to make more money, the focus is to ensure what we have remains viable, so where there might be an increase in one sense, there might be reductions or a refocus on spending in other areas.’
Meanwhile Kelly Smallcombe, founder of the ethical and vegan streetwear brand Evolved Creative in Bristol, said: ”Prices are on the rise wherever we look these days, and a sustainable business fighting with fast fashion always gives a price battle.
‘We will be holding off as long as possible to try and fight the price increase being passed onto our customers, and we hope that our amazing community will continue to support us as a small business.’
Elvijs Plugis, co-owner of Harry Potter-themed shop House of Spells in London, said a combination of Brexit and the pandemic saw manufacturers stop shipping big containers by sea.
Some containers have been at Felixstowe (pictured today) for double the usual length of time
Empty shelves in Leeds are picture today as stocks run low at a Sainsbury’s supermarket due to supply issues
He told BBC News: ‘A Harry Potter wand used to be £20, now it’s going to be £35-£40. All of the shops are running out of stock.’
Fuel supplies lower in London and South East than rest of Britain
Fuel supplies at petrol stations in London and the South East remain lower than the rest of Britain.
Figures from the Department for Business, Energy and Industrial Strategy show filling station storage tanks in the capital were just 27 per cent full at the end of the day on Sunday, compared with 37 per cent across the whole of Britain.
The situation was only slightly better in the South East (33 per cent).
Average stock levels in Britain sank to 15 per cent on September 25, two days after panic buying began.
In early 2020 – before demand was affected by coronavirus restrictions – stock levels averaged 43 per cent.
‘Today at 8am in the morning, we received calls from the official Platform 9 and 3/4 shop [in Kings Cross Station] referring customers to us as they have run out of stock.’
He said House of Spells normally makes a 20 to 30 per cent margin on each wand it sells, but it also has to pay a further 25 to 30 per cent in container shipping costs and another 30 per cent on customs charges.
Mr Plugis continued: ‘At the moment we have not raised prices – we don’t know how long it will be possible though.’
It comes amid fears that supplies of toys, electrical goods and other products will be disrupted this Christmas by logjams at UK ports.
Retail leaders say the shortage of HGV drivers to carry loads from docks around the coast is threatening festivities and the wider economy.
Shipping giant Maersk has diverted some supersize vessels away from Felixstowe – the country’s largest container port – to alternatives on the Continent such as Antwerp and Rotterdam.
It is hoped containers will then be transferred to smaller ships that should find it easier to get a berth at smaller UK docks.
‘Britain’s Christmas is relying on a Dunkirk-style removal of goods from Europe on to smaller ships bound for ports across the UK,’ said David Jinks, of the parcel delivery firm ParcelHero.
‘That looks to be the only way to bring many Christmas gifts home.’
Peter Wilson, of the shipping agency Cory Brothers, said the UK has a ‘significant pinch point around HGV drivers and the demand on them to move goods from the ports’.
Rishi Sunak says there will be a ‘good amount of Christmas presents available’ this year
There will be a ‘good amount of Christmas presents available’ this year despite supply chain issues, Rishi Sunak said.
The Chancellor was speaking after meeting with finance ministers from the G7 group of leading world economies to talk about the problem, with the politicians agreeing to work more closely to solve the crisis.
Retailers have expressed fears ongoing supply chain problems will result in higher prices and empty shelves into December, but the chief executive of the UK Major Ports Group said supply chains were ‘robust’ and ‘there’s no need to panic’.
A build-up of cargo in Felixstowe has led to shipping company Maersk opting to divert vessels away from the Suffolk port, while similar logjams have been seen elsewhere in the world including in the US.
Speaking to the BBC in Washington DC, Mr Sunak sought to reassure Britons as people begin to think about shopping for Christmas.
He said: ‘We’re doing absolutely everything we can to mitigate some of these challenges.
‘They are global in nature so we can’t fix every single problem but I feel confident there will be good provision of goods for everybody.
‘I’m confident there will be a good amount of Christmas presents available for everyone to buy.’
The problems are hitting deliveries of kitchen white goods, electrical appliances, toys, clothing and Christmas products, he added.
He insisted the supply chain will not fail but told BBC Radio 4’s Today programme consumers should ‘be sensible, think ahead, plan appropriately and order your Christmas goods and the items that you need in a timely fashion to ensure you have them’.
Gary Grant, of the toy giant The Entertainer, said yesterday that Barbie dolls and Paw Patrol toys are ‘prime candidates for being short in the Christmas season’.
He told BBC News: ‘There’ll never be toy shops with no toys. There will be toy shops without all the toys that they would normally expect to have. That is largely down to transportation and warehouse issues, rather than there being a shortage of toys.’
Alex Hersham, of the freight forwarding company Zencargo, used by brands including Vivienne Westwood, Swoon Furniture and Soho Home, said: ‘Some containers have been sitting at Felixstowe for double the usual length of time – between ten and 20 days – pushing the port towards capacity.
‘With Felixstowe handling almost 40 per cent of all the containers coming to and from the UK, this adds yet more imbalance to Britain’s supply chain.’
But Tim Morris, of the UK Major Ports Group, said: ‘There’s no need to panic. The global supply chains are very busy but they’re robust.
‘There’ll be some short-term fluctuations but retailers, their suppliers, all the logistics companies that work in between the manufacturing and the sales side will be working hard to keep supplies moving.’
Tory party co-chairman Oliver Dowden insisted the Government is ‘working through these challenges’, for example by boosting training places for HGV drivers.
Asked about Christmas, he said: ‘I’m confident people will be able to get their toys for Christmas. Some people buy very early for Christmas… others buy later. I would say just buy as you do normally.’
Meanwhile in the US, the country’s Toy Association has said the cost of children’s toys has risen by as much as 10 per cent ahead of the Christmas season.