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Lego says it won’t join pre-Christmas inflation push

The world's largest toymaker to absorb higher costs without passing them on to customers

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Lego has grown its sales about sevenfold over the past 15 years. Photo: Mark Kauzlarich/Bloomberg

Lego has grown its sales about sevenfold over the past 15 years. Photo: Mark Kauzlarich/Bloomberg

Lego has grown its sales about sevenfold over the past 15 years. Photo: Mark Kauzlarich/Bloomberg

Lego Group signalled it will not push up the prices of its colourful building-block sets ahead of Christmas despite soaring inflation in many of its key markets.

The world's largest toymaker said strong sales and a supportive family owner mean it can often absorb higher prices without passing them on to customers.

"We have moved slower than others when it comes to price increases," chief executive officer Niels B Christiansen said by phone.

"We want our products to be available and we have the luxury of not being purely commercial in our approach. We're privately owned, so it's not about the performance in one quarter, we want to do what's best for us long-term."

The decision by the Danish toymaker will pile further pressure on rivals Hasbro and Mattel ahead of the vital festive period, as they all face higher prices for energy, plastic materials and freight amid globally accelerating inflation.

Lego's strong sales and "top line momentum" mean it's better able to weather periods of higher costs, Mr Christiansen said.

"We're trying to counter the higher prices by being more productive, but primarily we've been able to counter inflation by growing our top line very fast," he said in an interview.

The Danish company in August increased prices on a few selected products, mainly toy sets targeting adult Lego builders.

Lego, which is owned by the billionaire Kirk Kristiansen family, has grown its sales about sevenfold over the past 15 years.

On Wednesday, it reported 17pc revenue expansion in the first six months of the year and said it won significant global market share.

Meanwhile, expenses jumped 26pc in the period, though part of that was related to investments in new stores and more factories to capture future growth.

Profit was largely flat, year-on-year, at 6.15 billion kroner (€588m).

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