February 5, 2024, vizologi

Are People Buying Less LEGO Sets?

Have you seen fewer LEGO sets in stores lately? Many people are asking if the popularity of these building blocks is decreasing. With new toys and games coming out each year, it’s natural to wonder if LEGO’s appeal is fading. Let’s look at the sales data to see if people buy fewer LEGO sets.

Are LEGO Sales Falling?

Annual Financial Reports

The annual financial report shows that Lego’s revenue increased by 1% to reach 27.4 billion Danish krone, or about $4 billion. The net profit for the year’s first half was 5.1 billion Danish kroner, down 17% from 2022. The company attributed the profit decrease to higher materials, shipping, and energy costs. However, it expects these costs to decrease as prices come down.

Lego has offset some of the higher shipping costs by siting manufacturing plants near key markets, like the U.S. Consumer sales grew 3% during the first half of the year, which Lego CEO Niels Christiansen credits to the strength of Lego’s brand and diverse product line. The company has also been expanding its portfolio and opening stores in new markets, especially in China, to drive growth.

Christiansen is optimistic and expects the company to continue surpassing the market and achieve single-digit growth by the year’s end.

Consumer Spending Trends

LEGO has done well even though other toy companies have struggled. Their revenue increased by 1% to $4 billion in the first half of this year. Meanwhile, companies like Mattel, Hasbro, Funko, and Jakks Pacific have seen significant drops in revenue and sales. People think LEGO’s success is because they sell various products for kids and adults. They’ve been doing better than the industry for 4-5 years. The demand for LEGO’s building sets has helped, even though costs have increased.

LEGO’s net profit has decreased by 17% from last year, but they are still hopeful. They’re growing faster than the market and opening new stores, especially in China. LEGO has done well in a tough toy market, showing they can change and succeed.

Industry Benchmark Comparison

Lego is doing well in sales compared to other toy companies. They have grown 10 percentage points more than the market for several years. This shows they are good at getting more customers and keeping their sales up, even when the market is demanding.

Lego’s products, like Star Wars sets, muscle cars you can build, and cityscapes, are popular with many other people. This means they have something for everyone. They also have new and in-demand products that help make up for materials and shipping costs.

Lego has put their manufacturing plants close to where they sell products, and they plan to open a new one in the U.S. They’ve also opened stores in new places, especially in China, which has helped them keep their sales high.

Factors Impacting LEGO Set Sales

Economic Conditions and Discretionary Spending

Economic conditions have affected spending on LEGO sets. Other toy companies have experienced a sales slump due to inflation. Despite this, LEGO’s consumer sales grew by 3% in the first half of the year, showing strong demand for LEGO’s building sets. LEGO has offset higher shipping costs by situating manufacturing plants near key markets and diversifying its product line. The company consistently gains market share, outpacing the industry by 10 percentage points yearly.

During the pandemic, demand for LEGO sets remained high, showing LEGO’s continued relevance. The company plans to open stores in new markets and introduce around 750 diverse products this year.

Competition from Other Toy Makers

LEGO’s sales and market share have not been significantly impacted by competition from other toy makers. LEGO has maintained a steady revenue and market position despite inflation-related issues affecting other companies.

The company has consistently outgrown the industry by 10 percentage points in recent years, allowing it to capture and maintain market share. This growth is attributed to LEGO’s diverse range of products, appealing to both children and adults.

LEGO has effectively managed macroeconomic pressures, such as higher material, shipping, and energy costs, through strategic manufacturing placement and strong demand for its building sets. Compared to its competitors, LEGO stands out through its robust brand strength, innovative product line, and successful expansion into new markets like China.

By opening physical locations in new markets and releasing fresh products, LEGO continues to solidify its position as a leader in the toy industry.

Vizologi is a revolutionary AI-generated business strategy tool that offers its users access to advanced features to create and refine start-up ideas quickly.
It generates limitless business ideas, gains insights on markets and competitors, and automates business plan creation.

Share:
FacebookTwitterLinkedInPinterest