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The Stealth Toy Giant

By Selena Maranjian - Updated Nov 16, 2016 at 3:47PM

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Bet you don't know which company sells the most toys.

Quick -- what's the world's largest toy distributor? Nope, it's not Toys "R" Us (NYSE:TOY). (Toys "R" Us, while indeed a large toy vendor, is actually exiting the toy business to a large degree, opting to focus on babies.) It's not even Wal-Mart (NYSE:WMT), though Wal-Mart's significant toy department has been blamed for many of the difficulties at Toys "R" Us.

Believe it or not, according to QSR magazine, which serves the "quick serve" (a.k.a. fast food) restaurant industry, the world's largest toy distributor is. McDonald's (NYSE:MCD)! It seems that about 20% of McDonald's sales involve Happy Meals, which feature some kind of toy. Happy Meals are celebrating their 25th anniversary this year, having debuted in 1979, when they cost just $1.00.

Why should this be of any interest to investors? Well, if you're considering investing in McDonald's or are already a shareholder, you'd do well to know as much about it as you can. Mull over this toy distribution prowess, and you may gain a few additional insights. For example:

  • Patience is sometimes key. It took a quarter of a century for McDonald's to grow its Happy Meal business to its current size. Sometimes competitors can emerge seemingly from nowhere -- but other times, they've been quietly toiling near you for ages.

  • When you distribute so many millions of meals to children, you have a large degree of power and influence. McDonald's has partnered strategically -- recently with Walt Disney (NYSE:DIS), which has helped boost both the appeal of the meals and the profile of Disney offerings. Once McDonald's has the attention of so many young ones, it is able to pitch them other things, and it can even float information and promotions by the eyes of parents, as well.

Sometimes unexpected details about a company can be important and can reflect major competitive strengths or weaknesses. Learn as much as you can about your holdings. If, for example, you learn that one company you hold shares in has a customer that contributes 40% of its income, that could be worrisome. If you learn that another company is the largest purchaser of eggs, that can be good to know if the nation's chickens suddenly start churning out more or fewer eggs. (By the way, McDonald's is America's largest buyer of fresh eggs.)

If you're intrigued by this interesting "quick serve" company, learn more about it on our McDonald's discussion board.

Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart.

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Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$139.37 (5.11%) $6.77
McDonald's Corporation Stock Quote
McDonald's Corporation
MCD
$266.29 (0.32%) $0.85
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$124.96 (0.56%) $0.70

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