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Elmo's on the wish list again

A toy trade journal issues predictions of the big holiday sellers, and notes that prices are on parents' minds.

September 26, 2008|From Bloomberg News

Mattel's Elmo Live, with a price tag of about $70, may be among the bestsellers for the holiday shopping season, according to the trade journal Toy Insider.

Another projected hit: Furreal Friends Biscuit, My Lovin Pup, from Hasbro, which sells for nearly $200.

But the journal also said that price-conscious parents would look to stay within budget this season.

That might not be easy. Hasbro, Barbie's maker, Mattel and other toy companies -- which bring in at least a third of their annual revenue during the fourth quarter -- have raised prices to compensate for higher plastic and energy costs.

But parents are also feeling the pinch of prices, causing them to be more selective this year, said Jonathan Samet, Toy Insider's publisher.

"They're still going to want to put a lot of products under the tree," Samet said.

Gerrick Johnson, a toy analyst at BMO Capital Markets, wrote in a research note this week that there could be a 2% decline in holiday toy sales. The number of parents worried about costs for toys has increased dramatically, he said.

U.S. toy sales through July fell nearly 1%, to $9.34 billion from $9.43 billion in the same period a year ago, according to NPD Group, a Port Washington, N.Y.-based research firm.

In 2007, toy sales decreased 2.4% to $22.3 billion, according to NPD data.

The most expensive product on the Toy Insider list is Hasbro's Biscuit puppy, which lies down and moves its head. It retails for about $179.

Toys that can be linked to virtual worlds on the Internet are increasingly popular with children, who are moving to electronics at an earlier age, Samet said. Exercise-themed toys will again be popular, he said, as parents try to combat obesity in their children.

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