As I said earlier, products from China will increase in cost by 40% by Christmas. That is the china cost.
If that happens, Hornby have certainly lost my custom. As an example, the Network Rail Class 121 in the 2021 range costs £79 - a stupid amount given the basic tooling, but hey ho. A 10% increase on that takes the price to £86.90. A 40% increase on RRP would take the price to £110.60 going by my calculations. That's a total increase of £31.60 - for no extra value, no extra detailing - nothing.
Are they eventually going to destroy the market with the continual price increases? I would assume that a lot of these models are bought by those who have retired relatively young (under 65) with good pensions - a demographic which is increasingly not going to be replaced as this generation die off, and the next lot of retirees have less spare case to spend.
They will, if they carry on like this.
Hornby has spent the past couple of years really damaging the market for the majority by producing limited runs of needlessly-expensive models for an ever-decreasing customer-base. Let's be honest - the current main-demographic which Hornby is aiming its models at is getting smaller and smaller and the next generation simply cannot, on the whole, match their larger budgets. There will always be a minority who can, though, and I fear that Hornby will aim their models at that market instead.
A lot of Hornby's current issues can be pinned down to one thing - the previous management. Under the former management, Hornby scrapped loads of old toolings - making reproducing older models impossible - and continued on a downwards spiral by not making enough of a profit. The number of times I heard "Hornby's in trouble!" was unbelievable. Having watched James May's
Big Trouble in Model Britain, it transpires that the previous management at Hornby were more interested in running the business as you would with any other company, and not as a model company. From what some of the interviewees in that documentary said, the management had no interest in what they were producing.
Hornby's issues continued really until last year, when the pandemic lead to them making quite the profit - it even got on BBC News' website a couple of times. I've banged on before about how the reason Hornby made so much money was purely because they produced overpriced products to a demographic which was just starting out in model railways and had no idea that their new £30 engine was actually worth £20 or less.
As an aside, but still largely relevant to the topic of increasing prices - a lot of the model railway community has itself to blame: not only for Hornby's price increases (the continued purchasing of models from Hornby has lead them to believe that people will always be willing to purchase their models), but also for the stupid increase in prices on the likes of eBay and Hattons' pre-owned section. People try to get stupid prices for knackered models, people buy them, and so the seller tries again - and succeeds - in getting their model collection sold off, bit by bit, for ludicrous prices.
As we've all said many, many times before on this thread,
Hornby need to get their act together. It's not as if the model railway community is stupid - we can see through this nonsense Hornby is giving us. They've not said in that statement how long the prices will remain at RRP+10%: will it be for the remainder of the pandemic (in which case, how do you define 'end'?), or will it be for a specific timeframe? The utter disrespect and contempt with which Hornby treats the model railway community should really show that they don't care about your average modeller - and they haven't for years. They care about profits, incomes, and squeezing as much as they can out of their customers. It's appalling.
-Peter
