Despite a challenging retail environment in SA, where many toy retailers are shutting down or scaling back, Toys R Us SA has reported 10% growth on its e-commerce platforms in the year to end-February.
While the broader retail sector struggles with closures and reduced operations, Toys R Us remains steadfast, continuing to grow and maintain its operations through strategic investments.
Business confidence among retailers dropped in the first quarter, reflecting the continued effects of high borrowing costs on consumers. The latest corporate retail comparative report from Trade Intelligence shows a 5% fall in retail sales over the past year. This downturn is attributed to economic uncertainties, increased competition, and changing consumer behaviour, making it difficult for retailers to thrive.
“Our focus on enhancing the online shopping experience has paid off significantly. We’ve made our e-commerce platform more accessible and user-friendly, meeting the evolving needs of our customers. Toys R Us SA stands as a testament to effective strategy and customer-centric approaches,” Toys R Us SA marketing manager Catherine Jacoby said.
In June, SA’s retail sector exceeded expectations, showing a partial recovery in consumer confidence and an increased readiness to spend. Though inflation has eased slightly, households still grapple with financial pressure from high living costs and elevated interest rates. Additionally, the growth from May to June surpassed forecasts, with June’s month-on-month increase reaching 1.6%, up from May’s 0.2% decline and exceeding the expected 0.6% rise.
A report from DebtBusters shows a decline in consumer spending power in recent years, caused by persistently high interest rates, increases in electricity and fuel prices, and the cumulative effect of inflation.
Toys R Us is among just a handful of retailers in SA that have not shut down any stores in the past six months. Three major SA retailers — Petzone, AutoZone and West Pack — are in business rescue, facing an uncertain future, while Pick n Pay has said more than 100 stores will be converted or closed.
“This continuity in physical store operations highlights the brand’s strong market presence and customer loyalty. We are proud to have maintained all 50 of our stores during these tough times,” Jacoby said.
According to Statista figures, revenue in the toys and games market in SA will amount to $381m in 2024 and is projected to grow at an average rate of 1.78% over the next four years. Demand for educational toys set to rise due to the growing emphasis on early-childhood development in the country.
Along with keeping its physical stores open, Toys R Us has made substantial investments in renovations. Recently, five stores have received upgrades, with plans for more enhancements in the near future. The refurbishments are meant to improve the shopping experience by creating a more engaging and enjoyable environment for customers.
“Our commitment to offering value to consumers, especially in challenging economic times, is unwavering. Our owned brands have played a crucial role in this, allowing us to provide high-quality toys at competitive prices. Shipping woes and high costs on imports have significantly impacted the toy market in the country and we continue to work tirelessly to ensure that we can pass value onto our customers,” Jacoby said.
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