For the third year in a row, Wal-Mart has gained ground as the number-one seller of toys among U.S.-based retailers, according to a recent report from market research firm The NPD Group. Based on the report, which lists the market share of the top 10 traditional toy retailers in the U.S., Wal-Mart controlled 19% of overall toy sales in 2000, a jump of 1.6% from 1999, and up 1.9% from `98. Reyne Rice, director of toy services at NPD, credits Wal-Mart’s continued dominance of the toy category to a combination of improved store performance and aggressive store expansion. Wal-Mart’s next closest competitor, Toys `R’ Us, also increased its market share in 2000 to 16.5%, a rise of nearly 1% from the previous year. Rounding out the top-10 list are: Kmart (7.4%), Target Stores (7.2%), KB Toys (4.7%), Ames (1.9%), JC Penney (1.4%), Meijers (0.9%), Big Lot (0.9%) and Shopko (0.8%).

Not surprisingly, the group that gave up the most ground in 2000 was the pure-play e-tailer. Whereas e-tailers were starting to eat into overall toy sales in `99, due to the lack of a must-have item like Furby or Pokémon, consumers weren’t nearly as compelled to shop for toys on-line in 2000, says Rice.

Specialty gift retailer Hallmark also saw its toy sales share drop last year. Eighth among toy retailers in ’99, Hallmark failed to crack the top 10 last year, a decline that Rice attributes to the dramatic drop in Beanie Babies sales.