The LEGO Group have today revealed that they will be increasing the prices of LEGO products later this year. Here’s the official statement from LEGO:
The current global economic challenges of increased raw material and operating costs are impacting many businesses.
Putting consumers first is at the heart of what we do as a company, and for some time, we have absorbed these costs to keep pricing stable. However, as these costs have continued to rapidly rise, we have taken the decision to increase the price on some of our sets. This increase will come into effect in August and September.The increase will differ depending on the set and prices will change on around a quarter of the portfolio. On some sets we will not alter price, on others there will be a single digit increase and on larger, more complex sets the percentage increase will be higher.
We will continue to work to ensure our products offer great value and full recognise how important this is to our fans and everyone who love our products.
In their 2021 financial results The LEGO Group proudly announced that they had made an operating profit of 17.044 billion DKK. In Australian dollars today that works out to about $3.39 billion, give or take a few million.
I am not arguing that LEGO won’t be facing pressures from global factors. That’s obvious. But when a hugely profitable business is faced with rising costs there are several ways to handle that – reduce expenses, accept lower profits or increase revenue. The LEGO Group may paint themselves as fun and friendly but beneath that playful exterior they are capitalists at heart and there was never going to be another option than to increase set prices.
The specific sets that are being increased have not been revealed to me. I suspect that this information has been provided to retailers by now for forward planning but as consumers we won’t know until prices suddenly go up in August. This will be existing sets and new sets.
Some further information from LEGO stated that prices will be changed on between 150-190 products out of a total portfolio of around 600 products depending on the country. They have tried to ensure that kids’ ranges have the minimal impact from price rises. The rises range from set to set, and the prices of our larger, more complex adult sets will have slightly higher percentage increase.
Actually that price increase in August is also a bit ambiguous – It is my understanding that what is going up is RRP and cost price for retailers. Independents may opt to sell existing stock at their current pricing until such time as they have to order at the higher price. LEGO Certified Stores and LEGO Online will likely pass on increases immediately.
Now that this news is public I will reach out to LEGO Australia to see what additional information I can get, but I don’t like my chances.
Working together
While I fully admit that my output has lower lately than in years past one of the key foundations of Bricking Around was covering local LEGO sales. If LEGO is going to raise prices of LEGO sets then that goal becomes more important than ever. This news has given me a new push to ensure that Australian LEGO fans get the best prices we can for LEGO now and in the future.
One goal I have is to hand some more power back to you – the Bricking Around community. I want to empower you to share deals with each other. Whether that’s a single set marked down at Kmart, or a retail sale that I’ve missed.
I don’t know what that is going to look like yet, so if you have any ideas please reach out.
I will also be working on technical things like improving the code for the Amazon deals page.
At the end of the day, we want our favourite toy manufacturer to be profitable and remain profitable into the uncertain future.
Lego will then feign surprise when sales drop as the already lowered perception of value for money falls off a cliff. Or they’ll buy more clone brands or other toys. Hasbro have learnt this the hard way with transformers sales when they bumped up prices dramatically.
Surely 3 billion in profit is not necessary for the company to survive and thrive? Could they not take the hit and use the good publicity instead?
Anyone defending this decision need to have a rethink, we want Lego to thrive but not at the expense of the consumers.
The only way for the company to thrive not at the expense of the customers is at the expense of the product itself. Cheap designs, cheap materials, no IP’s, no LUG support etc.
Nobody is happy with price increases, and it’s going to be tough all round. Support the retailers who don’t just Jack up all their prices on August 1.
Yes, 3 Billion is definitely a lack lustre profit margin that needs to be improved…
It’ll be a knee jerk reaction when their sales start to nosedive. They’ll make some awful decisions thinking that they need to make big changes again or introduce new lines to “revitalise” the brand, which will continue to hurt sales further. Lego have set the precedent for this already in their not too distant past.
They won’t think sales were affected by their greed, and continue to compound their errors with more bad choices and in 10 years will wonder where all their profits went.
People will vote with their wallets. Lego is already crazy expensive and for now seen as decent value for money for many families, but not for much longer.
Brickhawk.com is an existing, efficient way to keep abreast of set pricing and sales.
This is disappointing. LEGO is a passion of this household, but it’s already at prices that set it at one present for birthday or Christmas a year tops. And the sets that they like aren’t the ‘kid’ ones.
Thanks for your work.
Prices have already gone insane this year, now they want to go further? 76125 Iron Man Hall of Armour was released in 2021 with 524 pieces and had a retail price of $89.99. Releasing in June (before the August price rise)- 76216 Iron Man Armoury, pretty much the same thing but with different suits and has less pieces (496) is going to retail for $149.99. How much is the 2023 500-piece Hall of Armour going to be? $300?
I’m still yet to buy a Snowtrooper Battle Pack- there’s no way I’m paying $32 for a $20 set (the best I’ve seen it for on sale is $25, which is still ridiculous).
My teenage son has already turned away from Lego as the prices are just ridiculous especially on Disney sets and if Lego do proceed down this path they will leave a generation of new builders on the side line. He loves the shows, the quality of the product, and the amazing builds, but they are pricing themselves out of a key market if they go ahead with price rises when already profitable.
Agree with your comments that they should look inwards for cost cutting rather than stinging the end consumer…
A bit disappointing when you consider that the Lego Group is a private company. They don’t have to worry about their share price or shareholders toppling the board at the next AGM. While I don’t know how many family members the group needs to support I would have thought that $AU3.3 billion is a healthy profit.