Walmart and Target stand to gain most from Toys 'R' Us liquidation

Walmart Inc. and Target Corp. will get the biggest portion of the $7 billion up for grabs from the Toys ‘R’ Us liquidation, according to an analysis by Coresight Research.

A consumer survey the Coresight conducted found that 65.4% of Toys ‘R’ Us shoppers also browsed for toys and games at Walmart WMT, +1.64% The same percentage visited Amazon.com Inc. AMZN, +1.90% and 63.6% of the bankrupt toy retailer’s customers browsed at Target.

But the data shows that Toys ‘R’ Us shoppers were “considerably more likely than all toy shoppers to have bought toys from Walmart or Target TGT, +2.65% in the past year.”

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“Even though they are already in the top three, Walmart and Target look set to punch above their weight in terms of gaining shoppers from Toys ‘R’ Us store closures as they overindex for browsing and buying among Toys ‘R’ Us shoppers relative to all toy shoppers,” Coresight wrote.

Amazon’s Prime members numbered more than 60 million as of late 2017. A more recent Wells Fargo report put the number of unique visitors to the Amazon site at 185 million, or 72% of all web users, citing comScore data. An overwhelming majority (82%) of 1,400 respondents to a Wells Fargo survey said Amazon is a top five shopping destination. But that doesn’t necessarily give Amazon a leg up on Walmart or Target.

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“Amazon may be in first place by total number of toy and game shoppers, but its appeal is not universal, and its leading position in toys is almost entirely attributable to Prime members,” the Coresight report said.

Toys ‘R’ Us was the number four toy retailer after Amazon, Walmart and Target, measured by the number of shoppers, according to the report.

Credit Suisse analysis released late last week shows that Target stands to gain $600 million in sales from the liquidation.

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Coresight found that dollar stores like Dollar General Corp. DG, +1.97% , department stores, eBay Inc. EBAY, +1.12% and Costco Wholesale Corp. COST, +2.00% all stand to make significant gains as well, with Toys ‘R’ Us consumers both browsing and buying at a high percentage rate.

Toys ‘R’ Us began liquidation sales on Friday. While many retailers stand to gain from the liquidation, toymakers like Hasbro Inc. HAS, +0.20% and Mattel Inc. MAT, -1.59% are expected to be hurt.

Walmart shares are down 12.6% for the year so far, Target shares are up 6.2% for the period, and Amazon stock has gained 29.6% for 2018 to date. The S&P 500 SPX, +1.42% has slipped 2.3% for the year to date while the Dow Jones Industrial Average DJIA, +1.74% has dropped 4.8% for the period.

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