Toys R Us is struggling to survive in the UK. In 2018 it will close at least a third of its UK stores, resulting in 800– 1,000 job losses. The closures will focus on its bigger, warehouse-type stores — the very ones that marked the original Toys R Us out as different from the traditional toy shop. It’s a classic business disaster based on technological change.
In 2016/17 the UK market for toys and games rose by 6.3% to a best-ever £3.5 billion. Yet sales at Toys R Us UK fell by 4%. So its market share fell significantly. The explanation was largely due to one key fact: in 2016/17 36% of all toy sales in the UK were online. And in the online market, Amazon and Argos beat Toys R Us on price and therefore sales (Figure 1)
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