CAN THE PRICE OF LEGO BE JUSTIFIED?

Is Lego®  really facing cost pressures and can the latest increases be justified? 

The building block giant announced that it is facing cost pressures due to rising energy and logistics and raw material prices.

Lets look at their 2022 financial report;

Revenue grew by 17% to DKK 64.6 billion (US$9.2 billion).

Operating profit is up to DKK 17.9 billion with Net profit growing 4 percent to DKK 13.8 billion (US$1.9 bn) with  Free cash flow of DKK 9.3 billion (US$1.3bn).

There is a belief that Lego's price increases are profit driven - Lego is confident in their brand advantages and does not see the increases affecting sales. Lego has firmly held a monopoly position in the global building block market for many years, making it difficult for other players to enter the market due to many factors and unfortunately many adopt the wrong approach and simply "copy".  (We in no way advocate copyright infringement and the direct copying of Lego®.) 

Lego® has however become more and more out of reach for the average family and hence the need for budget friendly options. There are many compatible building block manufacturers who have ventured into creativity and produce unique sets. In just a few years original players in the building block market have emerged such as Senbao, Brucol, Pin Qi, Qiaohe, Weiji, Zhideler, Zhidele(ZDEL), and Keeppley. 

There are quality alternatives available with many options available to explore on-line. Locally alternatives are often difficult to come by and like many things in the local market, distributors who do stock alternate bricks are offering these at pricing equal to original Lego® sets!