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Published: Friday, 10/2/2009

Prices are key for toy sellers


NEW YORK - Santa's on a budget this year.

Toy retailers and makers plan to make the best of it by offering more deals and cut-price versions of more expensive toys that they hope will spur parents to spend even if they're scrimping elsewhere.

Parents are likely to keep shopping cautiously as they worry about job security, despite an uptick in home values and a rallying stock market.

"Price is more of a driving factor this year than it was before, and we will probably get our shopping done earlier so there are more choices," said Decatur, Ga., resident Ingrid Allstrom Anderson, 32, whose husband's engineering firm has been hurt by the long slowdown in construction.

BMO Capital Markets analyst Gerrick Johnson predicts toy sales will fall 1 percent during the holiday quarter. They were $9.82 billion last year, according to data from research firm NPD Group Inc.

That's a smaller drop than the 5 percent decline from a year ago, but still bad for a quarter when toy retailers make up to 40 percent of their annual sales. Toy makers can make up to half.

One bright spot comes from an unlikely place: a small manufacturer's toy hamster that retails for $8 to $10 and could be the first true "must-have" toy - that is, a toy that sells out and appeals to both boys and girls - since Mattel's Fisher Price TMX Elmo in 2006.

Cepia Inc.'s Zhu Zhu Pet Hamsters squeak and move around, and they've been impossible to keep on shelves, Toys R Us and Wal-Mart Stores Inc. say.

Toy Insider, a trade publication that puts together a list of toys expected to be hot for the holidays, has none in its top 20 that cost more than $100 this year.

Timetoplaymag.com, which put out its annual "Most Wanted" list yesterday, has only item on the list that tops $100: The Beatles: Rock Band video game, which costs up to $249.

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