LEGO sales and profit reach record highs cementing its position as one of the winners of the COVID-19 pandemic

Utku Tansel LLB, MBA

https://www.linkedin.com/in/utku-tansel-llb-mba-98231636/

Utku has 17 years of success in driving global thought leadership, project and content management, delivering strategic business intelligence and actionable insight to major international companies, retailers and financial institutions. Throughout his career, he has led many global research programs across a wide range of diverse and dynamic industries including Toys & Games, Licensed Consumer Products, Consumer Electronics, Apparel & Footwear, Homewares & Home Furnishings, and Personal Accessories & Eyewear. With a solid market research background, Utku regularly writes for leading industry publications including Global Toy News focusing on the most recent trends and developments. A sought-after speaker, he also presented at world-renowned industry events including Licensing International Mind Mix Executive Conference, Hong Kong Toys & Games Fair, PlayCon, World Congress of Play, and Walmart Global Toy Summit highlighting key findings from the latest global research studies.

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LEGO’s global sales increased by 43% to hit £2.6bn in the first six months of 2021 while profits rose by a whopping 140% during the same period. The company announced that its sales were up by more than 10% across all markets while online sales rose by 50%. The company plans to open a further 120 new LEGO shops, including 80 in China alone ballooning its total outlet number to 798 physical retail locations this year. This is part of LEGO’s business initiative towards what it calls an ‘omnichannel network’, operating in tandem with LEGO.com.

In the UK, the news story has come amidst rising concerns around stock shortages this Christmas period caused by the ongoing driver shortage as well as higher transport costs. However, the iconic brand remained confident it will not face problems in this regard. Previously, LEGO had addressed part of the threat by revealing that the company had secured enough shipping containers to keep up with the demand over the holiday season, even though they will have to increase prices to compensate for higher shipping costs.

LEGO’s announcement did not come as a surprise to many in the industry as shoppers stayed at home even after lockdown continuing to spend on both for themselves as well as their kids. We expect the strong performance to continue until Christmas, however, after the holiday season, the growth should stabilise to more sustainable levels while consumers return to pre-COVID spending habits.

LEGO’s most recent results confirm that the high street is far from dead and as channels, online and physical are complementary to each other. As I investigated partly in my Opinion piece in Global Toy News previously, “Shopping Reinvented: The Impact of Covid-19 on UK Retail & E-Commerce”, the high street is just evolving as it always has, and inevitably, there are winners and losers. The retailers that have disappeared in recent years are the ones that had already been struggling and the pandemic just accelerated the trend. In city centres, particularly, newer and better retailers are coming in which will undoubtedly help with the footfall into the high street. Going forward, this should accelerate as life gradually goes back to full normality. There is a huge opportunity and good retailers will continue to do well. 

Mintel Trend Experience Is All highlights that most consumers still put a premium on the advantages of shopping in-store which includes the ability to try products in person and to be helped by customer service associates that are also happened to be among the key USPs of LEGO. As I also investigated in my “What Can Retailers Learn from LEGO’s Success?” Opinion piece in GTN earlier, this trend is not about countering online sales, but rather turning shops into enjoyable experiences that promote purchases—either in-store or remotely. Shops are windows and adverts as much as places to purchase stock and they need to extend the time people spend there as well as the frequency of their visits. 

Furthermore, Mintel Traditional Toys and Games, US, 2020 report highlights that consumers need toys and games to bring more than just fun and brands can connect with adults by appealing to their need for wellness. It is clear that LEGO definitely got that right during the rather stressful (and gloomy) pandemic period and should continue to recoup the benefits in the short to medium term. 

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source http://www.expertclick.com/NewsRelease/LEGO-sales-and-profit-reach-record-highs-cementing-its-position-as-one-of-the-winners-of-the-COVID19-pandemic,2021261774.aspx