The British toy market is set to make a 'moderate' return to growth this year after suffering a one per cent decline in 2013, a report commissioned by the British Toy and Hobby Association (BTHA) has predicted.
The report estimated that overall growth in 2014 is expected to be worth £29m, with sales returning to 2012 levels, driven by rising consumer confidence, a stronger economy, movie merchandising, and the FIFA World Cup.
Natasha Crookes from the BTHA said: "Whilst it's too complex a market to be making any claims about 2014 being a vintage year for the UK toy sector, the forecast shows there are a number of factors in place to suggest a stronger year than 2013.
"Great years need to have brilliant toys but they also need to have significant external factors to drive momentum and 2014 has a number of those drivers in place to make it a more positive year."
The toy market last year missed forecasts and declined in value by 1% to £2.9bn after suffering a 5% drop in unit sales and despite a 40p increase in average prices to £7.92. The average spend per child under 12 totalled £306 spent on 38 toys. Christmas sales accounted for £1bn, or 35%, of annual sales.
The sector was particularly hit by a 12% decline in sales of pocket money toys - those sold for for £5 and under - which account for almost 45% of unit sales. The BTHA has predicted that this part of the market will see an increase as economic confidence returns across the country and pocket money allowances are restored or increased.
Global Toy Industry Analyst Frédérique Tutt explained: "The good news is that as the economy improves, the UK toys market is well positioned for a rapid recovery. As it is less reliant on toy sales tied to special occasions, [pocket money sales] react well when a new toy fad comes along - for instance, a strong movie licence or collectibles.
"As people feel more confident about the economy, they'll go back to adding these lower priced toys to their weekly supermarket shop, or they'll pay more visits to their local toy specialist."
2014 also highlighted the sector's reliance on TV, movie and internet licensing sales, to which more than a quarter of business is linked, after it was revealed overall licensing revenue dropped £44m against the previous year following the absence of a blockbuster movie or new leading entertainment properties.
The current year is expected to see an increase of £36m in movie related products, with "significant movement" in the market expected as a result of several big studio film licences.
Meanwhile, sales related to the 2014 FIFA World Cup are set to match or beat the £14m in additional sales generated by the 2010 event.
"The toy industry is a fast moving industry that reinvents its products every year and that places it in a perfect position to make the most of a more positive economic forecast," Crookes added.