Toys R Us Global Sales Numbers Dropped 3 Straight Years

WAYNE, NJ — Toys R Us did not adapt to the changing retail landscape and customers' needs in order to survive and its sales numbers seem to bear that out.

Globally, Toys R Us' sales decreased from $1.5 billion in 2015 to $1.3 billion in 2017. In the United States, the drop was even greater: $934.4 million in 2015, $855.1 million in 2016 and $782.1 million in 2017, information released by the company this month shows.

The New York Times previously reported that the Wayne-based retailer struggled to compete with online retail giant Amazon and stores like Walmart and Target. But that was not the only reason for its closing, one expert suggests.

"The competition may have been a big factor, but they did not “cause” the company’s demise. The fundamental reason was that the company failed to give consumers a good reason to choose its online and physical stores instead of its competitors," said S. Chan Choi, a Rutgers Business School professor and chair of the school's Marketing Department. "Some of the reasons they could have offered could include lower prices by improving its supply chain and distribution system, as opposed to Walmart, superior product experience and convenience, as opposed to Amazon, or customization with superior service, as opposed to Target."

Toys R Us announced March 15 that it would close or sell all 735 of its U.S. brick and mortar stores as part of a liquidation process following its filing for Chapter 11 bankruptcy protection in September.

The Wayne-based company kept the door open slightly for a comeback by announcing it is engaged in transaction discussions that could ultimately combine up to 200 of the top performing U.S. stores with its Canadian operations. Going-0ut-of-business sales have been held at about 180 U.S. stores for weeks now, including 11 in New Jersey. Babies U Us stores in Union and Bridgewater will close Saturday.

"The company needs to learn to yield some customers to competition and focus on a market segment in which they can offer superior customer value," Choi said. "To survive, the company needs to adapt to the new business environment and competition, and find new business models. It may require downsizing, but may offer new opportunities."

Sales went down every year in many global markets, especially in the United States, during that time. Australia, Japan, China, and part of Asia saw gains.

Although the company announced that all 100 of its United Kingdom stores would close, stores in its other international markets could be kept open.

Chief Executive and Chairman Dave Brandon previously said Toys R Us will sell or reorganize certain international business. Some international businesses, including those in Asia and Central Europe, Australia, France, Portugal and Spain are "considering their options," he said. Stores in those markets remain open.

The ever-increasing trend of buying online has made certain speciality stores, especially those that sell toys and electronics, particularly vulnerable to consumers' buying habits.

"Consumers can easily gather information about the products and read product reviews online. Then price and trust will be the final factor to steer them to such online sellers as Amazon and Walmart," Choi said. "Only those who need to touch and feel will visit brick and mortar stores, but a majority of them are captured by Walmart’s lower prices. The only way the company could have avoided the downfall was to turn the ship in a new strategic tack adjusting to the new wind."

Related: Toys R Us To Close All UK Stores
Related: Toys R Us Will Sell Or Close NJ Stores, Company Confirms
Related: Charles Lazarus, Toys R Us Founder, Dies At 94
Related: Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy

Photo: A shopper looks for gifts inside of the Toys'R'Us store during a Black Friday sale in Paramus, New Jersey in 2016. (Photo by Eduardo Munoz Alvarez/Getty Images)