May 24--Marcia Hanson runs her independent Great Toys store in Wayzata, vying for customers only three miles from a Toys 'R' Us site.
But Hanson said she doesn't mind the competition, even though the Federal Trade Commission this week alleged that Toys 'R' Us, America's largest toy retailer with 651 stores, has used its size and clout to keep prices high. Toys 'R' Us, which has nine Twin Cities stores, has denied the charges.
One day after the trade commission filed antitrust charges against the New Jersey-based retailer, Hanson said she was not surprised by the news, noting that Toys 'R' Us is "envied, admired and taken potshots at."
Despite a daily struggle to match prices and wits with a giant, Hanson is among a small number of independent retailers surviving in the Twin Cities toy market. Their success has come by carving out niches and emphasizing customer service.
For her part, Hanson hopes Toys 'R' Us, which commands about 25 to 30 percent of the nation's multi-billion dollar toy market, is vindicated.
"Toys 'R' Us has done nothing but help the toy industry," Hanson contended Thursday. "We would lose lots of wonderful toys if this big giant weren't around," she said. Toys 'R' Us provides an attractive mass market and incentive for manufacturers to carry on research and development in the toy industry, she said.
"I think they do my store well," Hanson added. "They provide exposure (for toy retailers)."
Hanson noted that when she was a buyer for Minneapolis-based Target in the 1970s and early 1980s, she found that toy sales were always higher when one of the company's discount stores was located close to a Toys 'R' Us site.
"It is tough for me to compete against them (Toys 'R' Us) pricewise because they have a broader profit margin and mix (of retail goods,)" Hanson said. "They keep my nose to the grindstone and make me stay smart with my business."
Hanson said one way she stays sharp is by emphasizing customer service. Her store features Legos and other "hands-on" toys.
Meanwhile, Creative Kidstuff owner Cynthia Gerdes said her five Twin Cities stores are thriving because they are the antithesis of Toys 'R' Us. "I put blinders on and do my own thing," she said.
Gerdes' stores feature creative and imaginative toys rather than those that are "TV-driven." That minimizes her overlap with Toys 'R' Us. "I look to have toys that a kid will play with for a couple years," she said.
Still, Gerdes said she has noticed that some of Toys 'R' Us' prices are high. "Because of their image, I think people expect them to be a discounter," she said.
At the Great Big Toybox in Edina, owner Debbie Castillejo also features creative and educational toys, offering more than 10,000 retail items.
Although she is conscious about competitively pricing merchandise, Castillejo said she also tries to differentiate her shop from Toys 'R' Us by offering customers good service and a well-trained sales staff.
Meanwhile, MaryAnn Scroggins has been in the toy store business since the 1950s but said she has never set foot in a Toys 'R' Us store.
"I don't think it is nice for children to go into a store that has boxes and boxes to the ceiling," said Scroggins, owner of the Afton Toy Shop in Afton. "What we deal in is memories, not merchandise."
Scroggins, the mother of eight children and eight grandchildren, said her store carries "beautifully designed toys" including some that adults buy as collector's items.
"Toys are the tools that children learn with," Scroggins said. "They might as well be delightful."
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TOY,
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