Good to see Mattel now cares about kids! They just announced that they hired a new toy line inspector named Irwin Mainway. They are about to rollout a new product, Bag O' Glass!
Posted on 09/14/2007 5:24:14 AM PDT by libertarianPA
NEW YORK (AP) -- Someone is going to have to pay all the extra costs of making toys safer. For now, toy makers and retailers are sharing the burden, but that's only expected to last until the holiday season. Next year, American consumers will be facing price increases of up to 10 percent to pay for the industry's increased vigilance after more than 3 million lead-tainted toys from China were recalled worldwide since June.
That means a $6.99 Barbie doll could go up to about $7.70, or a $70 child-friendly digital camera could retail next year for almost $80.
A 10 percent average increase would be the biggest one-time price hike in toys in several years, analysts say. And it's more than twice the government's measure of consumer inflation of 4.7 percent during the first seven months of this year.
Consumers could also see higher prices on other Chinese imports like fish and children's apparel, but the big price gains in toys could be more jolting.
Shoppers have become accustomed to cheap playthings from China because Wal-Mart Stores Inc. and other discounters have waged cost-cutting campaigns. Critics say real safeguards were sacrificed to keep prices low.
Analysts said the price increases are unlikely to hit until at least January because manufacturers and sellers already ordered the toys for Christmas. That's no consolation for parents, though.
"I will pay more (for toys) because I know it will ensure safety," said Lisa Sallese, a Wilton, Conn., mother of a 7-month-old boy and a 2-year-old girl. "But it stinks. It should have been safe to begin with."
Most of the rising costs come from emergency third-party testing in the U.S. by both makers and sellers as they aim to root out any unsafe products, analysts say.
Mattel Inc.'s three high profile recalls of lead painted toys since the beginning of August have pushed product testing to a frenzied pace. Companies are removing playthings from shelves and sending them to independent laboratories to be examined. The price of labor, overtime and testing will drive up costs in the short term, analysts said, but increased regulation will likely keep them higher.
The U.S. Toy Industry Association supports a federal requirement to make safety testing and inspection mandatory and is working with the American National Standards Institute to develop industrywide safety procedures. But during Wednesday's Congressional hearing on toy safety, senators urged even more stringent measures including stepping up fines for selling or failing to report dangerous items.
This year, "both retailers and manufacturers will share the costs," said Eric Johnson, professor of operations management at Dartmouth's Tuck School of Business. "But in the longer term, costs will have to go somewhere. And consumers will see it."
Johnson estimated toy prices will rise by 10 percent next year. He said most vulnerable are mass-market toys, including die-cast vehicles, which run the risk of containing lead.
Anita Frazier, toy analyst at market research company NPD Group Inc., added that higher prices will stick around because some toy makers will shift a portion of their production from China to the U.S. or Europe, where labor is more expensive.
This week, Toys "R" Us Inc., the nation's second-largest toy seller behind Wal-Mart, said it would be using an independent laboratory to test every branded product. The retailer will be absorbing the extra costs for now, but company spokeswoman Kathleen Waugh said she believes "pricing could increase" next year.
The Walt Disney Co. -- hit by Mattel's recall of 436,000 cars based on "Sarge," a character in the Disney-Pixar movie "Cars," that were believed to contain lead paint -- will independently test toys featuring its characters. The tests will begin in the next two weeks and will include all categories of products from about 2,000 licensees, including Mattel, which is the largest maker of Disney-related toys.
Disney consumer products spokesman Gary Foster said Disney will absorb the additional costs, which he estimated to be about several million dollars this year. It's unclear whether future costs will be shared by licensees, he said.
Price wars led by Wal-Mart have put financial pressure on toy manufacturers, though they have been able to push through price increases in recent years as they face higher resin and other related costs.
The average toy price remains relatively cheap because the bulk of toys sold involve $1 items such as card games and miniature cars -- impulse purchases that can be picked up in the local supermarket. According to NPD, which tracks prices of specific toys and categories, the average selling price of a toy increased to $7.53 in 2006, compared with $7.17 in 2005 and $6.97 in 2004.
Chris Byrne, a New York-based toy consultant, said shoppers can still expect price wars this holiday season, led by Wal-Mart.
Some shoppers say they are postponing toy buying until they are comfortable that the toys are safe.
"I am open to price increases as long as they are going to do their job," said Jenny McMorow of Buffalo, N.Y. "We've been spoiled enough by the low prices."
For her twin sons' birthday next month, McMorow will be avoiding traditional toys and looking at playswings or a sand box. "Nothing they can chew on or swallow," she said.
That means a $6.99 Barbie doll could go up to about $7.70, or a $70 child-friendly digital camera could retail next year for almost $80.
Seems like a pretty cheap way to keep children safe.
$1 to make sure the toy is safe. Bastards for not doing it from the moment they sold thier first toy.
Good to see Mattel now cares about kids! They just announced that they hired a new toy line inspector named Irwin Mainway. They are about to rollout a new product, Bag O' Glass!
Oh great, now they have an excuse to raise toy prices, right before Christmas. If the toy manufacturers had been inspecting their products after outsourcing, they wouldn’t have this problem today. I’m glad I not longer have to buy toys.
I was thinking the same thing. So my kids safety will cost extra. I for one will not be buying Mattel toys. And that decision was made before this.
NOW WE ARE REALLY DOOMED!
If the toy makers weren’t outsourcing their production to foreigners to make a few extra bucks, Made in America would pretty much guarantee few of the problems that are costing them so much money now.
This is just an excuse to raise prices to recover the money they lost due to out sourcing the work to uncaring foreign companies. Red China anyone??? Sure we can trust them cuz they are our friend!!!/sarc
This is as asinine excuse!
So, what the manufacturers are saying, if we want greater safety, we have to pay more?
So, in other words, you can go cheap if you want to endanger your kids.
You would think the manufacturers would have been doing this safety thing all along?
Kids have way too many toys as it is. Boo hoo if the parents can’t buy a mountain of toys for Christmas this year; I guess they’ll just have to settle for 15 new toys instead of 17.
“You would think the manufacturers would have been doing this safety thing all along?”
I expect that there are already many laws on the books that cover toy safety.
I know there are, but it didn't stop the manufacturers from selling these lead-tainted toys.
Now the manufacturers are saying, well, if you want us to obey the laws, it will cost you more.
Like I said, asinine.
I’ve already told my family that we will have a ban on “Made in China” toys for my daugther this Christmas. And if I have to, I’ll provide them information on where to get things.
Nova Natural and Waldorf are good sources for nicely made toys, especially wooden ones.
Maybe this will stop the culturally revolting habit of buying children 100 toys at a time. How about buying them just one, and teaching them the value of moderation right from the start?
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