Toy Recalls Threaten Black Friday Profits

A story out today from the Chicago Tribune examines how lead-tainted toys are still being sold at stores across Illinois. The 11-page investigation shows that consumers everywhere are still worried about toy safety, and analysts predict that these lingering concerns are going to damage holiday sales. This is a perfect example of how investing in product quality saves money in the long run: toy recalls have cost manufacturers and retailers billions of dollars this year, and that’s not helping anyone’s bottom line.

As the AP story below explains, Wal-Mart is slashing prices in hopes of convincing consumers to buy its faulty products anyway. However, cutting costs no matter what the price is the mentality that got Wal-Mart in this situation in the first place. When it comes to product safety, an ounce of prevention is worth a pound of cure. Wal-Mart could boost its stock price and protect American consumers at the same time.

Click here to read more about Wal-Mart’s product safety record.

Toy Recalls, Iffy Economy Aid Shoppers [Associated Press via Las Vegas Sun]

Lead on toys was bad enough, but last week’s recall of a toy tainted with a date rape drug threatens to turn into a lump of coal for toy retailers just as the key holiday selling season gets started.

The recall of Aqua Dots comes just as the industry was starting to see shoppers return to toy stores after summer’s high-profile recalls of more than 21 million Chinese-made toys with high levels of lead or dangerous magnets.

Aqua Dots, distributed by Spin Master Ltd. in the U.S. but made in China, was on many retailers’ hot toy lists, and there are very few substitutes, retail executives say.

Reports of children knocked unconscious after swallowing the tiny colorful beads set off a whole new level of worry among parents.

The good news for shoppers is that they’re being bombarded with free shipping offers and fat discounts as rivals like Wal-Mart Stores Inc. and Toys “R” Us try to out do each other and draw reticent consumers. Most of the discounting had been planned, but at least one toy retailer - eToys.com - added a free shipping offer after a disappointing October.

The Aqua Dot recall is “scarier than all the others,” said Stacey Ryan, of New Providence, N.J., who planned to buy Aqua Dots for her three-year-old daughter Shannon. The summer recalls had already made her cautious about buying toys for Shannon and her two-year-old sister Bridget. But she reasoned, what could be worse than them swallowing the Aqua Dots? Little did she know that the beads were coated with a toxic chemical that metabolizes into gamma hydroxy butyrate or GHB - the so-called date rape drug.

Now, Ryan is focusing on bigger toys like baby dolls and stuffed animals - items her children can’t swallow. “If it looks like a piece of fruit or a snack, I just won’t buy it,” she said.

“I really don’t understand how a toy like that can have something like that put into it,” said Colleen Scanlan, from Sun Prairie, Wis., who is trying to find a replacement for Aqua Dots for her daughters, ages 5 and 8. “They’ve been asking for it for about a year, so that one will be a big disappointment.”

While many toy merchants say so far shoppers largely have not been rejecting Chinese-made toys - which make up 80 percent of U.S. playthings - they are being choosier. A poll done last month by Harris Interactive showed that one-third of Americans say they will be buying fewer toys this holiday season due to safety concerns, and 45 percent said they will avoid buying toys made in China.

What effect the souring economy will have on sales is also still unclear. Consumers are wary, but even the most frugal parent will buy some children’s toys come the holidays.

Target Corp. has said that its toy business has been “soft” this fall, while eToys.com’s CEO Michael Wagner reported that October sales were weaker than expected. Amazon.com said it’s been pleased with its toy business; many others declined to comment saying that the bulk of holiday sales is yet to come.

The industry is worried that parents’ frugality could derail holiday sales, which showed a meager increase last year after several years of declines. Toy sales were up 0.2 percent last year, according to the NPD Group Inc., a research company based in Port Washington, N.Y.

Already, aggressive price cutting has begun. Wal-Mart kicked off in early October, at least a week earlier than a year ago. Over the Nov. 2-4 weekend, Wal-Mart, Toys “R” Us and K-B Toys Inc. wooed shoppers with weekend discounts and door buster specials similar to what they would offer on the day after Thanksgiving.

Such heavy discounting could depress sales even more, analysts say. BMO Capital Markets analyst Gerrick Johnson noted that he now expects toy sales to be down from a year ago; before the summer recalls he had estimated that toy sales would be slightly up.

The Aqua Dot recall opened old wounds, said Johnson.

“This could be the straw that breaks mom’s back,” he said.

As toy buying kicks into gear, there seem to be plenty of contradictions in spending patterns. While some small toy stores report a sales surge in naturally stained wooden blocks and eco-friendly stuffed animals, plenty of Chinese-made mass products are big hits, such as Fisher-Price’s Smart Cycle and Jakks-Pacific EyeClops, a handheld device that magnifies objects.

Brands that suffered recalls - such as Mattel Inc.’s preschool brand Fisher-Price and RC2 Corp. - are rebounding, according to Toys “R” Us officials. They noted Fisher-Price has done better than other brands hurt by recalls.

Online specialty stores like Oompa.com and ebeanstalk.com that sell fancier, higher priced toys also report hefty sales increases from a year ago.

Sue Warfield, president of the American Specialty Toy Retailing Association, which represents about 500 stores, says her members, long battered by discounters, are bracing for a turnaround.

“One bright side is it’s made people aware there’s more to shopping than just picking something off the shelf,” she said of the recalls. “You have to think a little bit more. You have to pay a little bit more attention.”

Still, amid a challenging economy, plenty of parents will shop for the best price. Ryan noted that she will stick to shopzilla.com, a shopping site, to search for the best deals, avoiding small toy stores.

“I think the shoppers are out there looking for bargains,” said Geoffrey Webb, director of advertising and sales promotions at K-B Toys Inc., which stepped up price cutting from a year ago. This season, the retailer launched what it calls its “supervalue” program, which offers discounts on hundreds of toys.

Barb Hollenbeck, owner of Second Childhood Toys, in Hastings, Minn. whose toys are about 20 percent higher than items found at discounters, said she’s seeing some new customers and expects higher sales this season.

Still, she is realistic. While she doesn’t see sticker shock among her new customers, “a budget will be an important factor” for shoppers.

“They are out there looking before they buy,” she said.

Posted by Alex Goldschmidt on Monday, November 19, 2007

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COMMENTS

Just in Time For Black Friday Too!

The list is complete!*

50 Ways to Avoid Wal-Mart During the Holidays

26. Read some books. The public library system can get you practically any book in print through inter-library loan. If they don’t have it, they’ll even buy them for you! What’s more, they’ll store it for you. Such a deal!
27. Teach someone to read. Access to the rights and privileges of citizenship is limited for those who can’t read. Tutors are needed in every locale. Empowering another person is one of life’s greatest pleasures.
28. Learn to maintain your own car.With shop time costing up to $50 an hour or more, doing simple maintenance is a real bargain. Sign youself up for a course or two at you local technical college.
29. Learn a language. People who are mono-lingual exclude themselves from participating in the richness of other cultures. The gentle route to being multi-lingual is through community colleges or do-it-yourself books.
30. Learn geography. Do you know where your water comes from, what mountain ranges are in your bioregion? Can you read a topographical map? Which nations are considered “Third World” and why?
31. Go to a local botanical park, arboretum or public garden. Now’s the time more than ever, to stop and “smell the roses.”
32. Go to the zoo. It may open your heart to the many species disappearing from the planet at the rate of two per day. What can we do? Hey…the animals might appreciate visitors during the holidays.
33. Visit your local museums. Many are free. By seeing art and artifacts of other cultures and civilizations we come to learn that we aren’t the only (or wisest) ones to have ever lived on earth.
34. Make music. Pick up the instrument you played in high school. Pick up a used one at a flea market. Make a deal to use the piano at your local church. Translating notations on paper into music is ecstasy. Translating the music you have inside yourself into notes on an instrument is ecstasy squared.
35. Take pictures. You will need a camera, but that will give you smart shopper practice. Research and compare. Search the want ads. Remember, taking pictures doesn’t have to be equipment-intensive. (continued...)

ScrewedbyWal-Mart in Anytown, America
Monday, November 19 at 08:47 PM

“The List” --completed (?)

36. Write. Start a journal. Write on any topic that comes to mind. Write a poem, even if it doesn’t rhyme - play with the sounds and meanings of words. Write an essay about a subject that gets your dander up. (if you can’t think of one, I can recommend one.)
37. Write to your congressperson. Participation is what makes democracy work. If you only communicate by voting, your representatives might not get your message right. See: http://www.house.gov
38. Write for human rights. People who are treating other people (or the planet) badly do not like to be watched. Let them know you know what they’re doing. Write first to Amnesty International, 322 8th Ave, NY, NY 10001.
39. Write to the media. Our positive acts - be they planting trees in our neighborhood or calling a citizen’s summit for a healthy city - are multiplied 1,000-fold if they are reported in the papers or on TV. Be the good news. Write a letter to the editor of your local paper urging consumers to use some sense this holiday season.
40. Join a club. If you have an interest or a hobby, there’s probably a club for it. This goes with #35. Join a photography club.
41. Clean your house. There’s nothing like purging your house of some of the things you impulsively purchased in Christmas’ past. Don’t buy another useless widget that will take up space, gather dust and increase your burden of consumer debt.
42. Bake some bread. Paeans have been written to home-baked bread. And whole shelves of cookbooks too (shop-aholics beware)! There’s nothing quite like the smell of fresh baked bread!
43. Have guests over to share a meal. Sharing a meal (as opposed to putting on a dinner party) is a wonderful way to express friendship. Breaking bread together is an ancient ritual, and it’s still the primary form of socializing for people in less affluent countries.
44. Make love. Certainly more compelling than shopping! What more needs to be said?
45. Write a will. Take your housekeeping to another level. Parcel out your worldly possessions on paper. Some people have given their treasures to friends and family before they die, so they get to enjoy the pleasure of giving.
46. Write a shopping list. Nothing ruins splurging like a little forethought. Make a list of what you need before you leave the house. Buy only what’s on the list.
47. Splurge ... but economically. The pleasure of saying “yes” to the urge to splurge is the same, whether you’re at the Salvation Army or Saks Fifth Avenue, and the morning after is a lot less painful.
48. Count your money. Know how much you’re earning and spending. Each dollar represents a portion of your life - you traded your life energy for it. Where is it going? Are you getting fulfillment for each dollar spent? Are you spending your life-energy (money) in ways that support your values?
49. Visualize world peace. Spend time thinking about what sort of future you’d like for yourself and for the planet. What one thing can you do this week to bring this world into being? “Living better” is about a lot more than “spending less.”
50. Do nothing. Perhaps the most challenging activity for those of us reared in the West is to do nothing. We’ve been raised on “don’t just stand there, do something.” The ability to do nothing is the hallmark of having “purged the urge to splurge.” Use the money you’d spend this holiday season to pay off or pay down your credit card debt. If you can do nothing, you are free!

Special thanks to “Purging The Urge To Splurge”
by Vicki Robin, various internet sources, friends, co-workers, and the reader’s of this blog for all the great ideas!

* This is actually a start. Now keep this list going and growing by adding more ways of your own!

ScrewedbyWal-Mart in Anytown, America
Monday, November 19 at 08:49 PM

“One bright side is it’s made people aware there’s more to shopping than just picking something off the shelf,” she said of the recalls. “You have to think a little bit more. You have to pay a little bit more attention.”

Now you’re talking, Sue! I don’t know what all this talk about the upcoming holiday season being bad for consumers is all about. There are going to be some bargains. Consumers have the retail industry by the throat if they only knew it.

That green paper in your pocket; those ‘blips’ on your debit/credit card. That’s what they want. That’s all they want and they’ll do whatever it takes to make you turn loose of them.

In another thread I said “‘Tis the season of the loss leader...”, so if you can’t “purge the urge to splurge”, go for the best deal.

As they say in baseball, Wait on it! The closer it gets to Consumermas, the more panic ‘they’ will feel.

Ken V in Texas
Tuesday, November 20 at 04:28 AM

Could This Be The Best Christmas Gift of All?

In case anyone missed this:

“...As for why there are not more ‘pro’ people here, all one has to do is look at the welcome they get...Why would you waste your time?”

The question he should have asked is why would we give anyone who supports Wal-Mart a “welcome?”

“I am going to leave here...Have fun, I’m out of here!!”

Donald in
Monday, November 19 at 09:18 PM

Well, it only took 2 years. Could “Donald” finally have seen the light at the end of the long tunnel he’s been in? Time will tell.

I think this is more like a hiatus. It’s like a disease that has gone into remission.

People like “Donald” don’t just go away.

ScrewedbyWal-Mart in Anytown, America
Tuesday, November 20 at 09:34 AM

Years ago when I was a kid I remember well loads of “after Christmas sales.” Retailers were looking to unload all their Christmas merchandise they had left over. But now there is no such thing as “after Christmas sales.” Now it’s “pre-Christmas sales.”
Yes, Ken, consumers certainly are in the drivers seat these days! Many do have the retail industry by the throat. As a consumer I don’t want to pay more than I absolutely have to. As a retailer I am constantly looking for bargains so I can offer bargains to my customers. In my industry, over the past few years, there has been A TON OF OVERSTOCK PRODUCT. I have many sources to purchase such merchandise. Sam Walton certainly started something many years ago when he began offering customers low prices!
And by the way this idea of “black Friday” being the best shopping day in the season is bunk! The bulk of the Christmas buying is done during the last 2 weeks before Christmas. I don’t know who started this “black Friday” business but you couldn’t buy it from many retailers!

Jane in N.Y. in
Tuesday, November 20 at 11:29 AM

9m: Are you one of the poor unfortunates to succumb to A.D.D.? (Aqua Dot Disorder)?? And ,so soon on the heels of your recovery from that nasty bout of e-coli ,just a few weeks ago?

ddrb in
Tuesday, November 20 at 01:53 PM

Is it just me ,or is it a sad irony, that the distributor in the U.S. is named SPIN MASTER,LTD????

ddrb in
Tuesday, November 20 at 05:32 PM

hey all you moron walmart haters you got anything to say on your favorite expensive costco,target,kay bee toys, toys r us and others getting sued by the state of california for lead in toys?

matthew vantress in gresham oregon
Tuesday, November 20 at 06:15 PM

I think this is a huge problem we have with all the stores selling defective crap from China. But seeing as Walmart is the biggest retailer in the world they are getting their fair share of the blame. Our government is also to blame for allowing dangerous goods to come into this country in the first place!

But the majority of the blame is with us, the consumer. We always want the cheaper and faster way. But at what cost? Our safety? The outsourcing of our jobs to other countries? Crappy wages and employer practices in this country?

I have seen you on here vehemently defending Walmart. Do yourself a favor and rent the documentary film by Robert Greenwald entitled “Walmart, the High Price of Low Cost”

And is your name really Matthew Vantress? Just curious as I once knew someone by that name back when I lived in the Portland area. So you finally got online. Good for you!

Corgishepmom in Irrigon, OR
Wednesday, November 21 at 02:50 AM

I will always agree with a dog-lover, Corgishepmom, but I have to take issue with this:

Good for you!

Good or him, maybe, but good for the rest of us? I’m not so sure.

Welcome to WMW.

Ken V in Texas
Wednesday, November 21 at 04:42 AM

yes that is my real name i am not afraid to use my real name on here unlike most others.i saw greenwald film on walmart and sorry i dont believe it all that crap.i worked in union grocery and for k-mart and have observed the unions that criticize walmart fail to do anything to get their grocery workers and union members living and quality wages and off the food stamp and welfare ranks plus more hrs.the ufcw union is a sham.sorry i dont buy films backed by nothing but union and govt bs and propaganda.mr greenwald did do a film on union grocery that i do believe www.supermarket swindle.com because i worked in union grocery and saw myself and others treated far worse than walmart has ever treated any of their workers or has been accused of.same thing i will make on k-mart.why dont someone for once pick on k-mart they pay a hell of a lot less than walmart does,so do the ufcw union grocery workers at the bottom of the wage scale they make poverty level wages and some have to get on food stamps because they cant get enough hrs to get benefits.this is very prevalent in union grocery i observed it.also i work presently with a former high level manager for the kroger chain and he has confirmed that everything i say on here about union grocery workers and so many of them having to get on food stamps and public assistance is true.he saw it all the time in the stores.got an answer on that one folks like you ken?

matthew vantress in gresham oregon
Wednesday, November 21 at 06:43 AM

Matthew -

As you’re kind of “new” around here, this is your unoffical scorecard of the “little people” at Wal-Mart Watch:

Ken V in Texas - could care less about unions, public assistance, or anyone, for that matter (unless they are female) - his goal is to help rid the world of Wal-Mart—period. Also loves to quote people (so long as it supports his cause).

SanDiegoView - rambles about the same stuff over and over and over and over and over, again. Has a real jones for Costco. Also part of the tribe who believes Wal-Mart’s successes was built on the backs of its’ workers.

ScrewedbyWal-Mart in Anytown - Greenwald’s orginal lap dog. Much has been said about him, here so nothing more need be said.

ddrb - I’ll have to get back with you on that one..........

FOM in USA
Wednesday, November 21 at 09:27 AM

Watch Your Step, matthew!

FOM in USA… another pile of cow dung!

ScrewedbyWal-Mart in Anytown, America
Wednesday, November 21 at 09:54 AM

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