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| Countries covered: United States Brief Excerpt from Industry Overview Chapter: The US toy and hobby store industry includes about 9,000 stores with combined annual revenue of about $20 billion. Major companies include Toys "R" Us, Michaels Stores, and AC Moore Arts & Crafts. The industry is highly concentrated: the top 50 companies generate about 85 percent of revenue. COMPETITIVE LANDSCAPE 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 industry is labor-intensive: average annual revenue per employee is $125,000. Toy and hobby stores compete with mass merchandisers. Toy retailers also compete with consumer electronics stores, due to the increasing popularity of electronic toys and video games. Hobby stores compete with fabric and sewing goods stores in select market segments. PRODUCTS, OPERATIONS PRODUCTS, OPERATIONS & TECHNOLOGY TECHNOLOGY Major products include toys (30 percent of sales), craft supplies (15 percent), and kitchenware (10 percent). Other products include games, hobby goods, artificial flowers, and sewing and knitting materials. Toy stores may provide assembly or delivery services. Hobby stores may offer classes, known as “how-to” seminars, and picture framing or floral arrangement. Toy and... |
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