The toy market declined by 1% to £2.9bn last year as sales of lower priced ‘pocket money’ products declined.

While the average price of a toy increased from £7.52 in 2012 to £7.92 in 2013, the number of units sold fell 5% to 364 million as sales of toys priced under £5 slumped 12%.

Online sales represented 34% of overall sales.

Information firm The NPD Group, which compiled the data, said the toy market is “reliant on impulse buys”, which represent almost 45% of all unit sales. “So any decline has a significant impact,” it said.

Strong sellers last year included toys in the youth electronics and games and puzzles categories. Furby sales jumped 66% and was the best-selling toy of the year. Other strong performers included Barbie, Lego Friends and Monster High for girls, delivering growth of £13m of sales against 2012.

The data has been compiled to coincide with the Toy Fair that is running in London this week.

NPD Group global toy industry analyst Frédérique Tutt said: “In the UK we know that the impulse purchase of toys has been hit hard by the squeeze on consumer spending. In 2012 sales of ‘blind bag’ toys under £5, such as collectible Lego Mini Figures and Moshi Monsters, were a real driving force in the UK, much more so than in other European markets. Last year the industry was unable to keep the momentum and lost out on pocket money sales.  So whilst higher value toys performed well, it wasn’t enough to compensate for the high volume/low value items.

“The good news is that as the economy improves, the UK toys market is well positioned for a rapid recovery. As it is less reliant on toy sales tied to special occasions, it reacts well when a new toy fad comes along – for instance, a strong movie license or collectibles. As people feel more confident about the economy, they’ll go back to adding these lower priced toys to their weekly supermarket shop, or they’ll pay more visits to their local toy specialist.”