Kroger partners with the remnant of Toys R Us

Dive Brief:

Kroger on Friday said plans to bring exclusive brands from Geoffrey's Toy Box — among the surviving assets of Toys R Us after its liquidation in bankruptcy — to almost 600 of its U.S. grocery stores in time for the holidays.
Starting this month, participating stores will have Geoffrey's Toy Box displays and merchandise, 35 toys from brands including Animal Zone, Imaginarium, Journey Girls, Edu Science, You & Me, and Just Like Home, priced $19.99 to $49.99, according to a company press release.
Last month Toys R Us canceled an auction for its intellectual property and said that it would be acquired by a group of investors led by secured lenders to Geoffrey LLC, a holding company for some of Toys R Us' remaining assets.

Dive Insight:

Plenty of retailers are moving assertively to grab market share abandoned by Toys R Us, but Kroger is the first to join up with that ghost of Christmas past.

Amazon, Walmart and Target are poised to grab the most, according to many analysts. But Party City, Kohl's, Michaels and BJ's and other major retailers are also adding to their assortments and their toy marketing to help fill what retail think tank Coresight Research calls "the gap in the $20.7-billion toy market left by Toys R US." Along with box players and mass merchants, FAO Schwarz made a comeback to New York, Buzzfeed is opening a toy store and independents have said they could have their best year yet.

In the near term, retailers have contended with the toy sellers liquidation sales. U.S. toy revenues in the first half of the year rose 7% to of $7.9 billion, with the growth pushed by Toys R Us' going-out-of-business sales, according to research from The NPD Group cited by Coresight Research. The firm added that "part of the demand may have been pulled forward from the second half of the year and we might see softer growth in the holiday season." NPD previously found that the total negative impact of the liquidation this year would be about 3.4%.

But filling the Toys R Us void is a long-term task. Walmart, Target and Amazon have all made expansive additions to their assortment and marketing to grab the roughly $1.3 billion in U.S. toy sales left by Toys R Us. They have a good chance of success, too, given their respective overlaps with Toys R Us shoppers and physical stores. It's less clear what a cobbled-together remnant of Toys R Us' remaining intellectual property and brand assets might be able to achieve.

The grocery channel may be a good place to start, though. In an April op-ed for Retail Dive, Tim Hall, CEO of research firm Simporter and former Hasbro exec, said toy makers should target grocery stores in a post-Toys R Us world. "Notwithstanding the emerging trend of home delivery, it's still fair to say that virtually every household visits a supermarket at least once a week," Hall wrote. "And for households with children, many parents take their kids along for the ride."