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How the demise of Toys R Us is impacting holiday sales

Experts say if you're trying to snag hot toys at the last minute this year, you'll probably head home empty-handed.

An employee arranges toys on a rack at a Target Corp. store in Westbury, N.Y.
An employee arranges toys on a rack at a Target Corp. store in Westbury, N.Y.Read moreAlex Flynn / Bloomberg / Bloomberg

The whirlwind of the holidays often leaves even the most organized shoppers scrambling as Christmas draws closer, but experts say if you’re trying to snag hot toys at the last minute this year, you’ll probably head home empty-handed — yet another shift in the first holiday season sans Toys R Us.

Since Toys R Us liquidated its stores this year, many of the biggest names in retail have angled to snag a piece of the former heavyweight’s business. Amazon, Walmart, and Target have been leading the pack, introducing toy catalogs and substantially increasing their toy inventories. But their strategies reflect businesses that aren’t toy-centric outside the holiday season, which means they’re aiming to sell out by the time the stockings are stuffed, according to Adrienne Appell, senior director of strategic communications for the Toy Association.

"This is the first time a lot of these stores are stepping into the toy market in a big way," Appell said. "You're going to see toys in a lot more places this year, but they also want to make sure they're not left with inventory."

Nearly half of sales in the $3.3 billion U.S. toy industry happen during the holidays, according to research from the NPD Group, with business getting progressively busier the closer it gets to Christmas. For Toys R Us, which commanded about 12 percent of the U.S. toy market in 2017 according to NPD, last-minute dependability was a unique highlight in its holiday strategy.

“The difference between Toys R Us and everyone else is that Toys R Us would want their shelves to be fully stocked toward the end of the year,” Appell said. “If you didn’t have something in the eleventh hour, you could walk into Toys R Us and expect their shelves to be full.”

Holiday toy sales are high stakes for buyers, because Christmas lists of children are often highly specific and inflexible. About 70 percent of Toys R Us’ sales were because “kids asked for the specific toy or brand of toy,” NPD senior vice president Juli Lennett wrote in a blog post in October. But although other retailers have stepped in to become the new holiday toy destination, pushing their lineups of hot toys such as Hatchimals and L.O.L. Surprise eggs, they have bulked up early with the intent to sell out.

According to a recent survey from investment firm D.A. Davidson, out-of-stocks in toys around Black Friday were lower than normal — but like sales, they’re getting higher as Christmas approaches. Big-name toymakers, such as Mattel and Hasbro, are also wary of having too much product left on their hands after the new year, and that, too, will lead to empty shelves earlier. The takeaway: waiting to buy popular toys is a big gamble this year.

“The hot toys will probably be 80 percent gone by the week or so before Christmas,” said Linda Bolton Weiser, an analyst with D.A. Davidson.

Amazon may be best suited to fill orders late in the game, Bolton Weiser said, because the online giant has historically had deep inventory. But last-minute online orders are still vulnerable to shipping delays or mishaps.

“Ordering anything online is a crapshoot,” Appell said. “If there’s something your kids are really asking for, don’t wait.”