The UK toy industry had sales of £3.4bn in the year to September, according to Circana.
The sector is now entering the crucial festive period with six weeks to go to Christmas, as retailers concentrate on Black Friday and encouraging people into physical stores as well as visiting their websites in the run-up to 25 December.
Christmas Day falls on a Wednesday, which is generally seen as a benefit to shops. However, the Toy Retailers Association said sellers faced cost pressures on the future owing to the employers National Insurance rise announced in the Budget.
Sales of toys and games saw a big lift during Covid as more families spent time at home during lockdowns, but sales have fallen since 2021, and currently sit just below 2019 levels, according to Circana.
It said the average price of a toy last December was £12.95, while more than six times that amount was typically spent on toys for children aged up to 10 at Christmas.