Filed under: Wal-Mart (WMT)
The Boston Globe reports that shoppers are buying toys for their children at small stores and avoiding Wal-Mart Stores Inc. (NYSE: WMT) whose Chinese toys they fear.
One Cambridge, MA store, Stellabella Toys, has shifted its merchandise suppliers from Chinese to European and U.S. toy makers. Stellabella bought as many LEGO toys (made in Denmark) and Playmobil products (made in Germany) as possible. And it added new lines, including German stacking toys and wooden trains from Maple Landmark Woodcraft of Vermont.
More than 65% of consumers will refuse to buy toys from China this season. This hurts Wal-Mart which offers cheaper prices by importing Chinese merchandise. That’s because 80% of all US toys are manufactured in China, where they are cheaper to produce. It is more likely that the Chinese toys will end up in mass merchants like Wal-Mart, which often carry large volumes of toys.
I don’t know if Wal-Mart will start buying safe toys — its purchasing volume could drive down the prices and thus bring back some of those shoppers. But in the meantime, you can check out the toys sold by small stores like Stellabella. At least it’s supplying what American shoppers want — safe toys for their families.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Wal-Mart.
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