It's water pistols at 10 paces in toy wars Lina Gomez and her children Nicolas (4) and Camilla (3) pictured shopping for toys at Target in Bondi Junction / Pic: Sam Ruttyn Source: The Daily Telegraph THE battlelines have been drawn in this winter's annual battle for supremacy in Australia's $33 billion toy industry. In one corner is Kmart, which has endured the wrath of customers after it decided to sit out this year's sales and scrap its long-term layby, popular with parents wanting to buy Christmas presents months ahead. In the other corner are the other major retailers, which have launched a host of promotions and discounts to win a bigger share of the mid-year toy spree, which now almost accounts for the same amount of revenue as Christmas. Kmart has taken the early hits, with customers slamming its decision on the company's Facebook page, but the company is banking long-term low prices will pay dividends. Competitors have been quick to capitalise, with Toyworld offering a no-fee layby service to try and win over disaffected Kmart customers. Toyworld spokesman John Redenbach said the mid-year "toy wars" were almost as important to retailers' bottom lines as the Christmas rush. He said June and July now accounted for about 22 per cent of toy retailers' annual sales, closing in on the 27 per cent of revenues generated in the December rush. "If you're in the toy business you have to make a lot of noise in those three months," he said. Mr Redenbach said the various stores differentiated their offerings and staggered the release of their sales catalogues to avoid "a race to the bottom" in prices. Target toys business manager Anthony Grice said demand for its long-term layby service was increasing as careful parents spread the growing expense of Christmas out over several months. "People are wanting to keep the hot toys out of prying eyes but also the ability to manage their finances accordingly," Mr Grice said. Kmart toys head Nicole Szujda disagreed, saying there had been a shift away from the mid-year sales. "Last year we saw a decline in the July period throughout the market - not just us," Ms Szujda said. We saw a significant shift of those dollars back into November and December. She said 30 per cent of products bought on layby during the mid-year sales were later returned as new products were released and children began asking for different things. IBISWorld senior industry analyst Crag Shulman said sales in the Australia toy market had been flat for the last five years - post the GFC - giving customers more competitive prices. Mother-of-two Lina Gomez said she hedged her bets when it came to buying Christmas presents for her children. I don't buy all their toys now because they usually change their mind between now and Christmas.