Grannies and granddads are expected to splash out less on toys this Christmas.

While sales in the overall toy market fell 1% in the first half of this year, spending by grandparents dropped by 16% - and this followed an 8% fall in 2011, according to data from toy market analysts The NPD Group.

Researchers found that about 300,000 fewer grandparents spent out on toys between January and June 2012 compared with the same period last year – meaning about 3% of Britain’s 7.9 million grandparents have left the toy market.

“Grandparents play a key role in the UK toy market but have been spending progressively less on toys since the beginning of the squeeze on consumer spending,” said NPD toy industry analyst Frederique Tutt. “Last Christmas, grandparents recorded a four-year low in terms of spending on toys and this downward trend could be reinforced this year.”

Grandparents have also become more deals-savvy, and are delaying their Christmas purchases to find the best prices. “Although UK toy sales are highly driven by promotions, we have seen consumers - and particularly grandparents - paying more attention to deals and offers instead of immediately buying the items on their grandchildren’s wish list,” said Tutt, adding that 45% of grandparent’s Christmas purchases were made on promotion in 2011, against 35% the previous year.

NPD also found that British grandparents were less generous than their European counterparts, spending less on their grandchildren than the French, Germans or Italians.

“It is surprising that the UK, which is the largest toy market in Europe, is in the bottom two of our European Index for grandparent spend on toys at Christmas,” added Tutt.

Meanwhile, a poll of 1,000 UK parents commissioned by Playmobil found that the average 3 to 10-year-old’s bedroom is filled with a whopping £1,200 worth of toys - almost five times the value of toys parents had when they were youngsters.