From its Lancashire HQ, toy supplier HTI – led by UK MD Mark Walls – is planning to make toys a more important fixture in our nation’s supermarkets. Tara Craig finds out how
Fleetwood has a whiff of the retirement community about it. Perched on the flat sands of the Lancashire coast, an hour’s drive from Manchester, it’s certainly not a place you’d expect to find a Santa’s grotto stuffed with 3,000 toys.
That’s exactly what you’ll find in Fleetwood, though. It’s the UK headquarters of HTI, Britain’s biggest family-owned toy manufacturer, complete with a colourful showroom filled with everything from Hello Kitty scooters and Toy Story figures to whoopee cushions and farting putty, and regularly plays host to the company’s retail customers.
HTI’s customer base is changing. Independents and wholesalers still account for a sizeable slice of its business, but the multiples’ march into toys is making itself felt. Supermarkets today account for 20% of the £2.9bn British toy market the fourth biggest in the world and value sales through the multiples climbed 14% last year [NPD 52w/e 31 December 2011]. So how is HTI meeting their demands?
According to Mark Walls, managing director of HTI’s British operations, the mults have not always been convinced of the pulling power of higher price toys. It took HTI’s flagship role-play range, whichnow includes a panini toaster and a kettle with a boiling noise realistic enough to satisfy even the most demanding child, to convince them.
“We used our kitchen, supermarket and tool bench toys to show them that people would buy the more expensive products from supermarkets,” says Walls. “They flew off the shelves.”
Licensed toys are another attraction for the mults, says Walls, pointing to Peppa Pig, Ben 10 and Toy Story as recent successes. HTI has several ranges of its own, including Dubble Bubble water guns and pocket money range Jokes and Gags, and makes own-label lines for Asda, Tesco, Wilkinson and Argos, among others.
Success with the supermarkets also depends on presentation, says Walls, who admits that their shelves, designed with cans in mind, do not necessarily lend themselves to toys. To overcome this hurdle, HTI works with retailers to create clipstrips and free standing display units, an indication of just how keen the company is to get into more food-based shops. “With certain retailers especially the grocers we are not yet maximising our accounts,” he says.
Conventional toy shops still have the edge (according to NPD, they account for 34% of the market but sales only nudged up by 1% last year), even if the multiples are growing. “They survive because of the breadth of the range they offer. And the service not many retailers can talk knowledgeably about toys,” says Walls.
C-stores are another valuable sector, he adds, pointing out that this wide range of outlets and price points is paying off 2010 value sales were £66.2m, up 12% on the previous year, and the company is projecting sales of £73m this year, up 10% on last. It seems HTI still has plenty to play for.