Despite higher prices because of tariffs, holiday traffic picks up at Minnesota toy stores

Toy stores are hoping weather does not become the enemy just as they picked up steam this holiday season.

Small Business Saturday, usually a large driver for independent stores, was slow, said Holly Weinkauf, owner of Red Balloon Bookshop along Grand Avenue in St. Paul, and others.

“I think that was more related to the weather,” Weinkauf said. “Now things have been going well for us this month.”

Small plush Jellycats, 3D-printed dinosaurs and big furry puppets are big sellers, she said. These and other “must-have” toys, plus a big push by local parents to support small shops, are helping Red Balloon end the year on a high note.

But Weinkauf worries about January.

“Our margins are super thin,” she said, “and many people are stretched.”

Weinkauf said she’s budgeting conservatively for 2026 amid continued tariffs and inflation and economic uncertainty.

The uncertainty is nationwide.

“No one knows what to expect this holiday,” said Sue Warfield, president of the 4,000-member American Specialty Toy Retailing Association.

The independent stores all are passing on the tariffs, making this Christmas more expensive for parents and unsettling for retailers, Warfield said.

The toy sellers have dug in, hosting store events like Lego building contests, introducing rare fun products and turning to local toy suppliers to boost sales and whack costs. It’s uncertain if the approach will work.

The U.S. Chamber of Commerce recently reported shopkeeper “optimism is declining heading into the holiday season.”

Scott Fares, co-owner of the Wet Paint art supply store in St. Paul’s Macalester-Groveland neighborhood, said his profits are too thin to be able to absorb tariff increases. Nearly 65% of the art supplies, toys and kits he sells come from overseas and were affected by Trump’s trade policies.

To keep doors open and 20 workers employed, Wet Paint raised prices on products hit by higher tariffs.

It started buying directly from manufacturers where it could, opened a picture framing shop and “went much deeper into ordering kids’ art supplies and kits” after area toy and craft sellers such as Creative Kidstuff, Jo-Ann Fabrics and Treadle Yard Goods all shut their doors, Fares said.

The gamble paid off so far.

“We definitely are selling tons of kids’ stuff,” including new card-making, printing and silk-screening kits, Fares said.

“They are super hot. I sold three yesterday,” Fares said, noting that parents are spending $25 to $52 per kit.

The bigger bet into children’s toys should help the store reach its 2025 goal. Fares wants sales to rise 5% even as profits stay flat due to rising costs.

Trying to boost sales during this economy “has taken a lot of extra work,” Fares said. But he added he’s grateful. Customers aren’t grousing about the economy when they check out at his cash register.

Instead, they say they are intentionally avoiding big-box stores this year to support tiny shops like his.

Two miles away, Dan Marshall, who co-owns the Mischief Toys shop in St. Paul with his wife and daughter, said his sales jumped 15% this year, even as some costs jumped 20% due to tariffs on imported toys and games.

With that kind of strong customer support, but still facing tariff supply woes, “it’s been a crazy, weird year. Key word is weird,” Marshall said.

Last spring, Mischief joined gaming manufacturers in suing the Trump administration over tariffs.

While awaiting a court ruling, Marshall said he is busy selling articulated 3D-printed dragons and lizards as well as Sonny Angel figures from Japan and “Smiski glow-in-the-dark, little mopey guys that are supper lovable,” Marshall said. “They’re super popular.”

He hopes sales are strong enough this Christmas to match or exceed 2024 sales. Right now, it’s too soon to know. Snowstorms make foot traffic “tricky.”

Logan McKee, owner of Prior Lake-based Games By James, Puzzles By James and Air Traffic Kites & Games stores, gets around weather woes by placing his eight stores in malls in Minnesota and Wisconsin.

The bigger space allowed for better displays and public gaming nights, which help sell almost all the extra inventory McKee bought before rising tariffs. Now he has to reorder.

Games By James and Air Traffic generate $5 million to $10 million in sales. The first 10 days of December, the company saw sales increase 20%, a bump he didn’t expect.

This month, customers scooped up popular board games like Catan ($59.99) and Finspan ($49.99), and lots of lower-priced options like Exploding Kittens cards and horror game “Fun Girl” that retail for $12.99 and $24.99.

Grey Duck Games & Toys in Maple Grove is also busy as parents and kids dash in to grab Magic Pokémon trading cards, “Dope Slime,” Nee-doh Fidget Toys, and gecko marble run sets that stick to the window.