While LEGO remains one of the pillars of international toy brands, that’s never completely ensured its success in terms of product sales everywhere that it’s available. In some parts of the world, LEGO products appear to be undergoing a bad patch in sales figures, like what’s happening in Germany now.
Germany has always been a major market for LEGO, considering that it’s a direct southern neighbor of Denmark, home of The LEGO Group. However, these past few years, there’s been a downturn. LEGO Deutschland reports that its market share for 2017 has declined by 0.4%, continuing the trend from 2016.
And Germany’s southwesterly neighbor Switzerland has had a bad year for LEGO as well. The 2017 revenues for LEGO in that country dipped by 3.3% added to Germany’s 2.6%. It’s disconcerting, considering that before the decline started in 2016, LEGO sales were consistently up for 13 years prior to that.
It should be noted that in 2017, a restructuring by The LEGO Group led to about a thousand of its global employees being made “redundant” and thus let go. One can’t help but feel that there’s a connection between that and the decreasing sales for the company in places like Germany.
Fortunately, there’s still something of a silver lining to all this. According to Plasteurope.com, the German market share for LEGO in 2017, about 16.8%, means that despite sales troubles, LEGO is still a bigger name in toys than Hasbro, Mattel or Playmobil. Furthermore, lines such as Technic, Friends and City remain popular in spite of the sales decrease. That’s a good thing for the future.
While this is news, we are talking tiny declines, comparatively. It’s also revenues; we don’t know how profits are affected. Are their costs being cut enough? Being regional, too, it could be offset somewhat by other region’s growth. This is natural. The Lego Movie was a massive boost for Lego, bringing a lot of attention and welcoming new and returning fans alike. And then there were the investors………. The period where the Lego Movie was then on home formats, streaming……was followed by the astounding hype for The Force Awakens.
Two huge events, in proximity which spiked Lego sales beyond reasonable levels.
With publicly traded companies the onus is always on making more each year (and why some companies hold back particularly strong earnings with creative devices). It is not sustainable.
Lego makes absurd profits and if they are determined, for no rational reason, to cut costs, pump out more product to show yearly and quarterly gains….the short term gains will resulting long term losses.
I say rational reason as if a company can make less short term profit, in the region of single, low digit percentages for long term sustainability it should. Private companies can do this.
I also reiterate; revenues are not profits.
I do think that the influx of larger, expensive sets (some great value like many Ninjago Movie, some not) won’t help. The Last Jedi wave carried intimidating prices, for example.
Hello?
Disconcerting, really?? Lowest one-digit declines and spme even below 1.0!?!
That’s not disconcerting at all! Not after so much growth!! It’s called laws of economics and they apply to the giant that Lego is as well. My goodness, we are living in a world where the slightest, insignificant changes are made into huge drama stories – and by doing so you don’t seem to realise that you are actually fueling the fire.
Not by acknowledging the facts, but the way you are doing it.