Getting serious over toy safety

Toy prices are expected to rise as retailers demand higher safety standards.

MCCLATCHY NEWSPAPERS

RALEIGH, N.C. — This Christmas season might be one of the safest times to buy toys for children, but it also could be one of the most frustrating for shoppers hunting for the hottest releases.

After several toy recalls this summer, manufacturers and retailers are stepping up inspections in their stores, plants and warehouses.

Though that’s good for the safety of the U.S. toy supply, the timing is awful for toy retailers, most of which already have placed their holiday orders — many are awaiting shipments.

There are 3 billion toys sold each year in the United States, and many toy retailers ring up at least a quarter of their annual sales in November and December.

But with 80 percent of the toys sold in this country originating in China, the scope of the shifts in safety standards has ramifications for this holiday season and even into next year.

Possible shortages

In the short-term, toy stores this year might see inventory shortages, and the resulting slump in sales could also lead to higher toy prices and a decrease in seasonal hiring.

Independent stores, which normally stock fewer mass-produced products, are not immune to the effects. They also are predicting shortages or ordering a more diverse array of products to offset the effect of any shortages.

In the long-term, the ripple effect of this summer’s recalls are expected to reach far into 2008, with rising toy prices and the possible expansion of the new testing standards to other products.

“Vendors are putting a lot of pressure on their manufacturing plants in China to get it right,” said Jim Silver, editor of industry magazine Toy Wishes. “The whole process is going to get slower.”

The recalls that started it all were a trio of announcements over a five-week time period from toy giant Mattel. Consumers learned that toys bearing some of this country’s most beloved brands, including Barbie and Sesame Street, were among the recalled products.

Though retailers say they are moving quickly to ensure the safety of their inventories, there are signs that it is not business as usual.

At a Target in Raleigh, there were holes on the shelves recently where Barbies and Barbie accessories would have been stocked.

A sign on the shelf told shoppers that Mattel had recalled some Barbie accessories because they contained hazardous lead paint.

Retailers are trying to address the recalls, especially when it comes to reassuring worried shoppers that toys are safe.

New guidelines

Wal-Mart introduced new safety guidelines that include 200 additional tests each day on toys likely to end up in children’s mouths.

Toys “R” Us launched a Web site for product safety and recall information, and sent customers an e-mail alert from chairman and CEO Gerald Storch outlining his company’s new measures.

KB Toys stepped up its inspections of incoming shipments and toys already on store shelves.

“What we’re more concerned about at present is the current inventory,” said KB Toys spokesman Geoffrey Webb. “The manufacturers are of course on a much higher alert to ensure what comes through into the country passes all the safety guidelines.”

Retailers have a short window for regaining parents’ confidence, said Candace Corlett, retail analyst with New York research firm WSL Strategic Retail.

WSL found that 49 percent of women temporarily stop buying an item when there is a recall, Corlett said. “But we have short memories,” she said. “It’s all going to be a matter of, if it’s over, or do they keep happening?”

Some analysts think the damage has already been done. Many are predicting toy shortages during the holiday shopping season as replenishment shipments are delayed for testing.

“Most Christmases, you’ll get situations where all these items sold out Dec. 10, and they say they’ll be in in three or four days,” said Toy Wishes editor Silver. “In a lot of cases, it’s not going to happen.”

Retailers say they will try not to let shipping delays limit their inventories.

“I don’t think the consumer will see it,” said KB Toys spokesman Webb. “Once the goods are in fact tested, then they’ll be expedited to the stores.”

Don’t put it off

But Silver said parents should not delay in grabbing must-have items.

“You won’t see an effect before Thanksgiving, but this is really a year to shop early for key items,” he said.

If there are any winners in this scenario, they could be independent toy stores, which generally stock fewer mass-produced toys.

But that doesn’t mean shoppers are any less skeptical of the products they stock, said Alan Cason, owner of AbraKIDabra Toys in Cary, N.C.

“We had a lot of people who came in and said, ‘My daughter said to get this for my granddaughter, but not to get anything made in China,”’ he said.

Unlike major retailers, who complete their Christmas orders early in the year, Cason and other independents are just completing their orders, which has allowed them to react to the recalls.

“I’m looking at a lot of companies I haven’t looked at before to have a little ‘made in the USA’ flavor,” Cason said.

“But I’m not going real deep, because I don’t know how much of a market there is.”

Looking ahead, this year’s toy recalls are likely to affect the 2008 holiday shopping season, as well.

The additional costs of more inspections and possibly expedited shipping for millions of toys will eventually be passed on to shoppers. Some industry estimates place the expected jump in prices at 10 percent.

Toys “R” Us spokeswoman Kathleen Waugh said prices won’t rise until next year.

And as the industry buckles down on Chinese-made toys, shoppers could see an increase in other consumer-product recalls, Silver said.

“You look at portable electronics, and there’s a lot of lead in portable electronics, and kids use them,” he said.