HOW TO MEASURE TOY MARKET GROWTH IN TIMES OF HIGH INFLATION
As we head towards the end of 2022, we’ll soon be seeing data suggesting the overall level of growth, shrinkage or stagnation the overall market has delivered. As someone who spends a lot of time researching and analysing data, I have one area where I think the trade press and broader mass market media are missing something important.
If the Toy market has grown in a particular country by a few percentage points in £/$/€ terms, but inflation is officially 10% (but in reality is probably significantly higher than that as government institutions are incentivised to under report inflation), then the market hasn’t grown in reality, in fact it has shrunk in ‘real terms’. To unpack this and explain further – the actual $/€/£ amount might show an increase, let’s say for easy maths you have a Toy market worth $1billion and the market grows by a normally creditable 5%, then the market would grow to $1.05billion. But if inflation is running at 10%, then in order to stand still in terms of actual real-world value, the market would need to grow to $1.1 billion. So in fact, the market has actually shrunk when you take into account the reduced value of the currency.
Frankly, a lot of Finance & Economics is above my pay grade & definitely way beyond my comprehension but shouting out market growth when everybody can see that hard numerical ‘growth’ is clearly not ‘real’ growth is potentially misleading.
There is no doubt that as ever our mighty industry is performing better during the current tough financial climate we are living through than many other industries, but we should also keep a grip on reality!
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