So inflation is so far the word of 2022, and even here in our little LEGO enclave, it looks like we no longer can hide from it.
Unless you live under a rock, you will notice that the cost of living has skyrocketed in the past few months, due to the War in Ukraine, supply chain issues, labour cost increases and rising interest rates.
LEGO have officially come out with an statement that there will be some increases to LEGO sets, taking in effect in August and September 2022
See below for an official statement from LEGO.
Update (10/7): Thanks to a US-retailer, we now have a partial list of sets that will be going up in price in the US.
Official Statement from LEGO on price updates
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 the LEGO Ambassador Network where this statement was shared, I did ask on the types of products, and whether sets at the lower end of the portfolio, catered to budget shoppers, families, and children would be impacted, and received this response
Prices will be changed on between 150-190 products out of a total portfolio of around 600 products depending on the country. (Prices will not change on approx. 75% of the portfolio).
We have tried to ensure that our 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.
So it does look like it’s mostly the larger and adult-focused sets that will be impacted.
At this stage, it’s not clear exactly what sets are impacted, although German news site Stonewars has a partial list that will impact the German market. I highly recommend checking their article out to see the impact of the LEGO price increases.
From their article, it seems like it’ll be a mixture of both old sets, and new sets as well, with LEGO Icons/Adult-focused lines seeing the biggest increases.
Of course this is already starting to become apparent – if you look at all the new second half (2HY) of 2022 sets which just released yesterday, you’ll notice that some prices are completely out of whack, even for previously “affordable” lines like LEGO City.
An example is the larger LEGO City sets, which cost as much as a Modular Bookshop, which is insane when you think about it. The Double Loop Stunt Arena pricing is especially egregious, but do keep in mind that the Modular Bookshop was from 2020.
So what can you do?
Not much unfortunately. Inflation is hitting everything, and prices are increasing on non-essential discretionary purchases like Nike Sneakers, Magic the Gathering Trading Cards.
In my professional life, I’ve had to also grapple with this issue as costs are going up across the board, and announcing price increases is never fun. For those that work in business, or companies where price increases have impacted the bottom line hard, this should be no surprise at all to see how a multi-billion dollar brand like LEGO responds.
Another option is to pull forward purchases before the price increase happens, which I think most people will do.
Personally, while no one wants to see the price of what they love increase, I feel like it’s unavoidable, and LEGO has done an okay job pushing it out this far, and hopefully trying to resist increasing the price of budget/affordable sets so that families aren’t impacted.
Unfortunately, because LEGO is made out of ABS plastic, and freight is expensive for large bulky sets, the increase in petrol/oil prices would definitely eat into LEGO’s margins.
Which brings me to my next point – despite having a blockbuster financial result in 2021 with record profits, fans will wonder whether this is appropriate.
LEGO is a business, and profit is its main motivator, and its easy to look at it in totality like that, however, because of LEGO’s close shave with bankruptcy in the 2000s, financial controls have been put in place, and I think margins on their products are extremely important – so if the cost of inputs go up, LEGO does have no choice but to increase the RRPs to defend some of their margins.
Update: for more context on LEGO’s financial systems, here’s an excerpt (sorry for the smartphone photos), from Brick by Brick, one of the key pieces of literature that’s given us a peek into how LEGO operates and thinks as a brand.
This section highlights LEGO’s Consumer Product Profitability (CPP) system, devised by designed by Jesper Oveson who was Jørgen Vig Knudstorp’s numbers guy, and was instrumental from saving LEGO from bankruptcy.
It’s a little old, but will shed some light on how LEGO looks at product profitability, and lessons its learned since almost going bust. I can almost assure you that these lessons remain part of LEGO’s DNA.
It’ll remain to see how consumers respond, and if there’ll be a reduction in demand as a result of this price increase. LEGO is still selling out constantly, but if LEGO is too aggressive with this, we may see decreased demand, and retailers will then have to discount more to move product, again, putting pressure on their margins.
What do you think of LEGO’s price increase?
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A 50% increase in price? Due to inflation which is only at 7%? I just looked at diagon alley, went from 399.99 to 599.99, thats 200 on top of 400, thats a stupid ass ridiculous percent increase. It should be outlawed, and i have 65 sets, now im done buying, just stupid. A set that yesterday was 99.99 is now 170.00, thats more than 50% increase, all these stupid lies are gonna snap all these multi billionaire companies, us people have had enough. DONE.
Sorry, I think those prices you’re quoting sound like Australian pricing – Diagon Alley is 599.99 AUD here. I don’t believe it will be that drastic in the US.
It’s nothing to do with Biden take an economics class
Lego prices been going up ever sense they bought Bricklink. It’s BS I’m done buying.
I don’t think the two are necessarily related, but the Bricklink acquisition was almost 3 years ago now, pre-Covid. The world has changed a lot since then.
There is no actually reason for LEGO to be increasing costs. The majority of their products are made in China and they have slim payroll compared to most companies. It is just a way to make more money and this was a perfect time and reason.
lol majority of LEGO (real LEGO that is not knockoffs) is NOT made in china. Most are Denmark, Mexico, Hungary and Chech Republic. In fact , they just announced theyre opening a new factory in the US so a lot will be made in the USA.
I noticed that LEGO has been fighting with inflation since the beginning.
It’s a losing battle, and we’re all losers 🙁
Thanks Biden
nothing to do with Biden dummy
Prove it genius. He raised gas, no one else did.
Didn’t know Biden is so all-powerful that he’s also able to manipulate and petrol/energy prices even here in Australia.
No wonder you Conservatives are so fearful of Biden because he seems to be Sleepy/suffering from dementia/all-powerful all at the same time.
Read a book, get educated and learn a bit about global economics and geopolitical factors before you embarrass yourself like this on a LEGO blog.
Hahaha, brilliant Jay!
Way to put brain-washed, uneducated Americans in their place!
Kudos
It’s nothing to do with Biden take an economics class
Guess I’ll be buying knock off sets on wish.com!!! Lego you already overpriced as it is! No more purchases from me. Greedy ass companies!
This is pretty embarrassing for lego as they already have overcharged their sets of years now! No wonder why people are looking at alternative brands that have better designs and better value !
I guess tou’re not a fan? I guess you like sub-standard crap.
Sub standard? I paid $400 for the ucs millennium falcon bnib lepin everything is there, figures and stickers are accurate and saved like $600-$700 as to $1200 on Amazon or $1099 on the Lego site
You can always just but fewer sets, or wait for sets to go on sale.
Please excuse my language, but this is utter bullsh*t
They’ve seen record profits over the last year and have just invested $1 billion dollars into that stupid f*cking Facebook metaverse crap.
Their products are also way too expensive as it is, this is greed, pure and simple. I think they will see a big sales drop when this comes into effect. Not massive, but likely enough to get their attention
I think my collecting days are coming to an end. I can hardly afford it as things stand and now to see the biggest sets (the stuff I’m interested in as an AFOL) get a huge increase? Yeah, they’re not getting my money anymore
Guess i won’t be getting that UCS Falcon any time soon. Guessing that’s going to jump to over £800
No, that’s fair and I too think that sales will definitely suffer.
Like many fans who are also grappling with the cost of living increases in other parts of their lives, we probably just need to be much better at picking sets, and perhaps buying less.
Gone are the days where it’s going to be feasible to purchase absolutely every adult set.
You forgot to mention cooperate price gouging…
While i understand price rises and inflation are a fact of life, some sets / themes feel like they’re already priced much higher than they should be. Lego City is an obvious one. Prices in some City sets are almost at AU$0.30 per brick, more than twice as much as other sets like Ninjago.
It’s the value for money that’s faltering. To use City as an example again: For some of the more expensive sets, you get a couple of road plates, a vehicle and a building facade. It feels like there is nothing of substance in the set to justify the cost. Focusing on the value for money I feel will alleviate impact of price rises.
If Bricklink round 3 was anything to go by, higher prices are not necessarily a barrier if the set is considered worth it.
I agree with your point about value for money, but keep in mind the BDP sets were limited-time, limited-stock sets produced for AFOLs with deeper pockets than children.
No, I agree. Even “homegrown” IP like City, and Ninjago don’t feel like great value at the moment, which is super disappointing.
I don’t even want to imagine what Star Wars/Marvel will look like.
Thankfully, those sets also go on deep discount, so we’ll just have to be more patient.
The ne Optimus Prime set price inbthe USA is USD170, here in Mexico is pricesñd the equivalent of USD215, a 27% increase compared to the USA MSRP.
We dont have the same spending power to invest that much on a toy. Lego has always been an expensive brand but a price increase and continuos rise of living costs in this country will surely alienate buyers. Come on, I’d rather buy a Nintendo Switch than a Lego set.
This right here, Lego can’t compete with other brands at that price point unless it’s down to serious collectors but if the price keeps increasing they are going to burn off more serious collectors the they create in the long run.
This is pretty embarrassing for lego as they already have overcharged their sets of years now! No wonder why people are looking at alternative brands that have better designs and better value !
Lol
Thanks Jay for asking LAN for a bit more insight on what kind of sets will be affected more. This certainly put some more urgency on getting sets on the wishlist.
It is understandable that their real cost have risen and they have to past some of that onto the consumers. But with Lego being a discretionary spend, consumers will simply buy less of it to stay on budget. Our wallet is the only lever we have. Will be interesting to see if there will be a full list of price changes revealed like how it was for Europe at the start of 2022.
Yeah, my advice is that (if you can), get sets now before they inevitably go up in price.
From the looks of it, it’s going to be across the board, affecting both old and new sets.
I agree – there are so many great sets I want to buy, but I have to be extra picky now, and/or be super patient till they go on clearance/deep discount.
Price rises on just about everything are inevitable – both those that are justified because of higher costs and those where businesses increase prices because they can. It does seem to me though that there’s “hidden” price increases in newer sets already (for example the Technic Ferrari Daytona is $A100 more than the Lamborghini for a similar piece count and complexity and the Creator Viking Ship is $A20 more expensive than the Pirate Ship, again for an equivalent piece count). I hope the newer sets don’t suffer big increases.
I agree with the approach of trying to maintain pricing on the sets most likely to be bought by and for children.
The increasing prices applied to new sets has been obvious for a while but I guess this means that existing sets will become more expensive. Australian prices are already significantly higher than the U.S.A. prices so a percentage increase will serve to exaggerate that difference.
Maybe I should buy the Titanic sooner rather than later.
Yeah, I’d prioritise the Titanic. Hopefully it shows up somewhere during the June/July toy sales – I’m guessing a Myer or David Jones will get them so they go on sale.