Cost of living crisis - impact on our hobby

[Neil]

It's unarguable that consumer prices across the board have risen sharply and look set to rise some more. Studies have shown that this has pushed an increasing number of households into difficult financial positions and logically further inflation will see more caught up into this group. Here is very definitely not the place to debate the causes (local or global) but we will all have felt the effects of inflation and it would be foolish to believe that it will have no impact on the way we pursue our hobby. It raises many questions, do we rein in our hobby spending hoping to preserve some margin of financial comfort as prices of necessities rise or do we carry on as normal and only trim spending when we have to? Will it be the one off, big ticket items (like new locos) which get the chop or do we economise with the smaller but more regular outgoings (magazine or club subscriptions). Will exhibition attendances drop, not because of the price of admission has risen but because the price of petrol to get you there has risen? Will ingenious pensioners use their bus passes on long and ingenious journeys to take themselves to shows that they might once have driven to? Will the availability of public transport be more of a factor in where exhibitions are held and will car parking become less crucial?

[Michael Hodgson]

There will be numerous consequences, but mostly negative,

• those who are in the worst financial difficulties will cut back most, in some cases totally (food comes first)
• expenditure on new products will be lower and less frequent
• some people will decide to sell some or all of their models, so the more affluent may find that there are more second hand bargains to be had as people try to raise cash for essentials;  prices should come down (in real terms)
• manufacturers and traders will have difficulty selling, so more items should be reduced in price, and production runs should be smaller with fewer new models produced.  Some firms likely to go to the wall.
• attendance at shows is also discretionary spend, and people will be more picky about which shows they attend.so attendance is likely to drop, and attendance at shows should decline, particuarly if the price is too high
• magazine sales should also decline for the same reason, and some may cease production.
• some individuals who have lost their day job may decide to try making a living pursuing their hobby and use their modelling skills (and perhaps 3D printers) to become new entrants to an already difficult market; some may even succeed.

[The Johnster]

I reckon the majority of modellers are fairly comfortably off middle class types with disposable income who will weather the storm (I’ve seen this before, late 60s and most of the 70s).  Their DI will be less and spending will be cut, but not eliminated.  
 

In my case, I’m just a poor pensioner and feeling the pressure, but I’ve already bought most of my big ticket items before it hit the fan (seen it coming for a while), and the running cost of my modelling is comestibles, glue and paint plus the odd transfer sheet, and I’m coping, so far. 
 

Priorities are rent top-up, bills, and food.  I am lucky in that I have no dependents, and The Squeeze is Polish, so naturally frugaland cost-efficient.  Might have to send the TIVO back to Virgin, though!

[SM42]

There will definitely be a cut back. 

 

I have become more discerning in what I spend and on what and am very conscious of the cost of my hobby with one eye on the future, even though I consider myself lucky to have a bit of financial headroom at present. 

 

Exhibitions face a double whammy of reduced disposable income of modellers and increased exhibition costs such petrol, venue hire and accommodation.

 

Some will go under, so will get through, likewise some retailers and manufacturers will make it, some won't.

 

Whatever happens, I don't think the hobby overall is in immediate threat.  

 

In the past we have lost some big boys such as  Mainline but from the ashes, phoenixes have risen. 

 

I remain cautiously hopeful

 

Andy

[D9020 Nimbus]

Previous periods of high inflation actually saw the emergence of new companies — the 1970s (Airfix/Lima/Mainline) and the early 1990s (Bachmann). The more recent period of low inflation didn't seem to help Hornby much. I suspect model shops may be at more risk. Sometimes you don't realise how much something will be missed until it's no longer around. I've particularly noticed this in the field of "Continental" modelling — the disappearance of dealers such as Winco and Model Masters leaves a gap; they weren't "cheap" but they did sell items that the big German dealers don't.

 

Most of the model making companies in the UK market seem to be well run — hopefully they will be safe.

[mike morley]

I will certainly be attending fewer exhibitions than I used to and will make sure there is plenty to justify the journey before I set off.

I had assumed that would be a widely-held view and that it would prompt exhibition managers to up their game in the hope of attracting those who shared that opinion.  That does seem to have happened with the bigger and specialist shows but having looked at the line-ups, both layouts and trade, of a lot of the smaller shows I am concerned to suspect that the opposite is the case and they are dumbing down, presumably to reduce expenditure, rather than trying to attract what custom there is.

[The Johnster]

Exhibitions are a bit of an odd case.  I was out of the loop between 1984 and 2016 after a disastrous divorce, and noticed a massive difference when I came back to the hobby.  Gone were the backroom industry trade stands selling small retro-fit improvement details, having all migrated online for obvious reasons, and the days when I would go to a show and come back with a carrier bag full of bits and pieces that I couldn’t obtain anywhere else are as the snows of yesteryear.  The stands are are now for more general retail outlets.   
 

This is because of the internet rather than the economic situation of course, but inflation could see a resurgence of the

is sort of backroom producers and of kits as well, since the 3D printing revolution has turned out to be pricey (for example, 3D printed coach bodyshells cost about the same as the more expensive RTR, then you have to factor in wheels bogies, couplings, probably better buffers and ventilators, paint, transfers, etc. to complete), not helped by Shapeways…

[pete_mcfarlane]

Does this mean that we won't be able to afford to buy any more kits, and will actually have to start to build some of the stash? 

Edited June 25, 2022 by pete_mcfarlane

[Mike Storey]

I have already stopped buying discretionary stuff, that I do not really need for the layout I am going to build.

 

But how soon will I have to stop buying stuff I do think I "need". That is when it will get worrying, although in my case, I do already have all the big ticket items, except some sound chips. We have already cut down on energy use, car use, eating out and holidays, in anticipation of the worst likely to come.

 

It'll be the fags next......

 

 

[James Harrison]

It is my belief that people will become more thoughtful about the nature of purchases they make and look rather to use their discretionary income primarily on bits that they can't make for themselves.  Electrical equipment and ready to run locomotives are likely to continue finding a market, probably rolling stock too.  My guess is that resin ready-to-plant buildings and other such scenic items will be the first to go unsold, then scenic kits generally in descending order of cost. 

 

At the same time I wouldn't be surprised to see increases in sales of home 3D printers and silhouette cutters- why spend £70 or £80 per carriage/ resin building/ whatever when you can spend a little more on a tool that will let you churn them out like sausages?  Also of course increased sales of the raw model making materials like plastic sheet.  Maybe even modelling with cereal box card and similar materials will see a resurgence.   

[MarkC]

30 minutes ago, pete_mcfarlane said:

Does this mean that we won't be able to afford to buy any more kits, and will actually have to start build some of the stash? 

Now steady on there - that roundtuit pile is an investment, doncha know... 😜

[johnofwessex]

I suspect that it will be more of a whimper than a bang, a few wagons or a coach less, one or two fewer trips to heritage railways etc

[Michael Hodgson]

1 hour ago, johnofwessex said:

I suspect that it will be more of a whimper than a bang, a few wagons or a coach less, one or two fewer trips to heritage railways etc

I still haven't been to a heritage line or caught a train from my local station for a couple of years now.  But that's not because of the economy - it's because of covid. 

[RJS1977]

3 hours ago, The Johnster said:

Exhibitions are a bit of an odd case.  I was out of the loop between 1984 and 2016 after a disastrous divorce, and noticed a massive difference when I came back to the hobby.  Gone were the backroom industry trade stands selling small retro-fit improvement details, having all migrated online for obvious reasons, and the days when I would go to a show and come back with a carrier bag full of bits and pieces that I couldn’t obtain anywhere else are as the snows of yesteryear.  The stands are are now for more general retail outlets.   
 

This is because of the internet rather than the economic situation of course, but inflation could see a resurgence of the

is sort of backroom producers and of kits as well, since the 3D printing revolution has turned out to be pricey (for example, 3D printed coach bodyshells cost about the same as the more expensive RTR, then you have to factor in wheels bogies, couplings, probably better buffers and ventilators, paint, transfers, etc. to complete), not helped by Shapeways…

 

I suspect the reason why the retro-fit detailing stands have disappeared is less because of the internet, and more because modern models have most of the details on them already.

[Nova Scotian]

Due to my relatively unique situation (two houses 250 miles apart, both that I live in - which is because of my kids) - I've already hit crunch time. My recent UK trip was the last of my discretionary spend in 2022 - the cost of home heating, petrol, and food has hit me extremely hard. Rising interest rates are going to hurt to due to debt I'm carrying following my house purchase last year with all the follow-on costs (thank god both mortgages are locked in).

I recently made an ebay purchase, second hand - I followed my rule which states I'll pay no more than 30% of what it'd go for in the UK if it's just something I like, or 50% if it's something I desperately love and want. The next day I ended up having to spend the same amount on a pair of work shoes and was kicking myself. 

Plans for any work on my layout are on pause until I can get my debt load down and see the end in sight on cost of living. Car payments are done soon which helps a lot. I had hoped the remote work trend would also open up some contracting options on the side for me, which had previously been difficult with my travel. Unfortunately my extremely stringent conflict of interest requirements still get in the way.

Ultimately I'll be spending almost nothing on this hobby for a year or so - but will still watch the forums and want to participate.

Echo the predictions that this is going to hurt some traders and manufacturers. In the long run it may cause an adjustment on pricing - those "prized" production slots may now be going for a discount as the potential for supply will outstrip demand. Those are all lagging though, so the first 6-12 months are going to be very painful for anyone carrying inventory, anyone who paid high for a production slot and won't see that return in sales.

Second hard market is harder to judge - prices were already rising pre-covid. Covid made them go gangbusters. Sometimes used car prices firm up in a recession, as people still want/need a car, there are less new cars being sold and the lower end of the market strengthens. I don't see that happening here, partly because the pricing is currently so high, but maybe the bottom won't drop out of it quite as much?

Even middle class with decent discretionary income/savings are going to have quite the shock from heating their home, food etc in the coming months. They won't be immune to this.

[Free At Last]

I don't feel it has hit me yet as I had already reined in my hobby spending when Hornby and Bachmann raised their prices to more than I am willing to pay. I spent £17.50 in 2021.
I now have a surplus of hobby money to spend elsewhere which Youchoos have been benefiting from and with more to go their way.
 

[James Harrison]

One impact I see happening too is in the content of Railway Modeller, Model Rail, British Railway Modelling et al.  I think it is fair to say that the days of one person or family being able to afford filling a decent sized room with off the shelf locos, rolling stock and buildings are numbered- if not already behind us. 

 

So in the mid to long term I predict we'll see less of that sort of layout appearing in the modelling press, and the balance will shift more toward a mixture of 

- lots of RTR but a collaborative or club effort;

- RTR locos/ stock/ track but the scenery is scratch or kitbuilt;

- layouts built around a small nucleus of RTR equipment (eg, industrial layouts built around Pecketts/ Hawthorn Leslies/ Bellerophon);

- or pretty much everything kit or scratchbuilt.

 

With a corresponding shift toward more articles on scratchbuilding and kitbashing.  

 

  

 

 

[Steamport Southport]

13 hours ago, RJS1977 said:

 

I suspect the reason why the retro-fit detailing stands have disappeared is less because of the internet, and more because modern models have most of the details on them already.

 

Apart from Craftsman and a couple of others such as Perseverance not being available, I have no problem getting the parts. Many of the "newer" parts are vastly superior anyway.

 

But a few manufacturers have said that most exhibitions are pretty pointless as they rarely cover the costs so they don't bother attending them anymore. Wizard/Comet stopped attending them. I don't think Alan Gibson or Markits attend them either.

 

I'm afraid most exhibitions are full of "pile it high/sell it high" RTR retailers and stalls that are akin to a rummage sale of old tat. I have noticed I'm going home with next to nothing when I had planned on spending a lot of money. Maybe a book or two.

 

If you want things like parts and kits then attend the relevant scale shows. Scaleforum, Guildex, 009 Society, N Gauge Society , etc.  Look at the websites of the manufacturers and see where they are attending. The parts are out there, you just need to find them.

 

 

Jason

[whart57]

I'm not sure the cost of living crisis is the major concern here. The majority of railway modellers are likely to be well enough off to be able to ride things out. Other trends were already in place before Putin went ape- and we shouldn't underestimate the impact of Covid.

 

Covid took a hammer to the established rhythms of life. Obviously shows were cancelled and production schedules for new products disrupted, but Covid also caused some rethinking. The first shows to return were cagey affairs and the uncertainty over government rules changing meant the big shows with big upfront costs didn't take risks. Potential visitors asked themselves whether the risk of catching Covid was worth it, and that wariness extended to exhibitors and traders. In theory two years of lockdowns, WFH and holidays at home should have resulted in a flood of new layouts. Has that happened?

 

The Covid lockdowns also made some traders question the economics of show attendance, mail order business was up and that was often enough to be profitable.

[MyRule1]

I fully agree with @whart57 in his views.

 

Personally covid coincided with final retirement , so that along with the rise in modelling costs for reasons that are well  known, by 2022 I had already adjusted my modelling to match possible expenditure. 

 

It's a unforeseen knock on effect I wanted to highlight. Due to the monthly cost of my daily newspaper, including  delivery,  reaching £70 I have moved to a premium online subscription saving £60 a month. Today I put the last of the papers in the recycling and suddenly realised how much newspaper I used in modelling from scenery to simple covering work surfaces when painting.

 

There is an upside as well. Due o the cost of driving to shops, approx £5 to DIY store and £12 inc parking to LMS etc, we have moved to more online purchases so our supply of cardboard has increased.

[melmerby]

3 hours ago, Steamport Southport said:

 

 

 

But a few manufacturers have said that most exhibitions are pretty pointless as they rarely cover the costs so they don't bother attending them anymore. Wizard/Comet stopped attending them. I don't think Alan Gibson or Markits attend them either.

 

 

Jason

Alan Gibson are booked for Warley this year.

Wizard aren't, that's a nuisance as a chat to someone on the stand to get the right bits for a project is better than looking on the website and then having to phone to check you've picked the right things.

 

[Michael Hodgson]

19 hours ago, Michael Hodgson said:

I still haven't been to a heritage line or caught a train from my local station for a couple of years now.  But that's not because of the economy - it's because of covid. 

But I have now 😃  Spent the day at the Great Central.

[Andy Hayter]

Some interesting observations largely based on personal circumstance but nothing wrong with that.

 

What we seem to have is a series of influences all hitting society and our hobby in short order.  

Covid has changed buying mechanisms and has stopped exhibitions - which are now slowly coming back.

Cost of living increases which started with power and fuel prices but is now spreading more widely.

War in Ukraine has generated if nothing else an increased sense  of uncertainty and an increase in prices (especially food) beyond those already in motion prior to the war.

 

We have seen views on where these factors have taken us and perhaps where they might project in the short term.  I would like to extrapolate further and think about where the hobby might be in 5 - 10 years time.  

 

Covid and traders

Covid has pushed more and more suppliers to offer on-line purchases.  As noted this has caused some of the more specialist suppliers to abandon exhibitions for the time being as "not being worth the time for the profit made".   Understandable but is that view long term sustainable?  The seller relies on his existing contacts and an electronic "word of mouth" (aka high Google profile) to maintain the turnover.  As I am sure we all know if you put an item into your favourite search engine, the first items that appear are most often Ebay and Amazon offerings.   So does that mean that the way forward for these small suppliers is to advertise their products via these two platforms?   And what happens if that word of mouth drops off for whatever reason.  Can suppliers afford to stay away from exhibitions long term?  And getting orders in via the internet is one thing, getting market information is another.  As an example, knowing that your LNER bogie kits are selling well is one thing but this will not tell you if there is a demand foe NER, GCR GNR etc bogies as well.  Putting one of those on the market will longer term then be more of a shot in the dark.  Also as noted above, the  inability to discuss needs face to face will undoubtedly stop some potential customers from even starting a project (as in perhaps to install signals or whatever).

 

Covid and exhibitions

We are seeing exhibitions slowly come back.  I think the big exhibitions will continue but perhaps with some reduction.  Maybe the odd major exhibition will not return, maybe the frequency will change from annual to something else.  [Here in France I am very used to exhibitions that occur every 2 or 3 years.]  WE have seen the success of virtual exhibitions during lockdowns.  Just maybe that is a way forward and especially to show off those layouts that were only ever designed for home use.

 

The small "village hall" exhibition, I can see continuing perhaps largely unchanged from the past.  Small local layouts and a few local traders with their largely non-specialist wares.  The problem with these is that they tend year on year to become very repetitive.  Repeat business then becomes a little more difficult.

 

The mid-sized exhibitions will I think be the impacted area.  These have mixed local layouts with those from further away.  Those from further away of course have (increased) travel costs and require overnight accommodation.  In the past this could be financed from the income from traders - traders who are now less likely to attend.   This then puts the onus for income onto footfall and door sales.  Some clubs have relied on the annual exhibition to fund for example the annual rental on their premises.  A bad exhibition could leave a club in financial difficulty - the more so since they have not had this income for the last 2-3 years.  Reserves will be low.   I think we will see a significant reduction in these mid-sized exhibitions and we may see some clubs folding through lack of funds.

 

Cost of living influences

 

 This is of course what the OP was asking about.  More and more I read of people who have all of their big ticket items so the increase in cost of living will not impact their hobby very much.  Very much an "I'm alright Jack attitude."  But what about the rest of us and, importantly, new comers and collectors?   By October this year, I guestimate that the increase in gas and electricity for the average household will have gone up in 18 months by the equivalent of 1 large loco per month!  The cut in disposable income will hit modellers pockets and many will have to cut back on their purchases. 

 

The question then is how that impacts the manufacturers.  Lower sales will impact profits  and some companies already struggle in this respect.   New models will have to be cheaper in real terms.  This means perhaps smaller locos, some degradation on detail (but we have already seen the market reaction to lack of sprung buffers and design clever).  The already in place move to industrial locos may see an increased impetus.  TBH it would not surprise me if we see one or two manufacturers in problems in the next 5 years - not necessarily just in the UK.

 

Manufacturers will have to become a bit more targeted in their marketing with perhaps smaller runs of items aimed at a segment of the market rather than most of the market.   The days of the big item (big price) offering will become very much more limited - fewer gig steam expresses, no 8 car Pullman sets etc..   Rails and Rapido might be seen as doing this already with offerings to the pre-grouping market but I am sure there will be other market segments previously viewed as fringe that might well benefit from a targeted approach.     

 

Magazines

As Paper prices increase costs will go up and there will be an increased benefit to receiving a digital version.  AS more and more find this route to their favourite read perhaps more will find RMWeb for the first time or other sites and decide they don't need their monthly model fix.  Can the market sustain 4 monthly mainstream magazines?

 

 

 

 

 

This may all come across as rather negative but the industry as a whole is in for a difficult 5 years IMO.  Past experience of hard times shows however that ways will be found through the problems.

[AyJay]

In this household, I think that it’s going to hit the regular expenditure harder than the one-offs.  First on my hit list will be the Sky subscription, rapidly followed by BRM.

With my other half telling me about the rising cost of the food bill, I could dig up the lawn to grow veggies. There’s also a lake nearby with lots of ducks on it and there’s a bit of a pidgin problem round here; anyone care to sell me an air-rifle?

There’s an expression I heard “Tough life makes hard people” l don’t want to get ‘hard’.

[whart57]

1 hour ago, Andy Hayter said:

Covid has pushed more and more suppliers to offer on-line purchases.  As noted this has caused some of the more specialist suppliers to abandon exhibitions for the time being as "not being worth the time for the profit made".   Understandable but is that view long term sustainable?  The seller relies on his existing contacts and an electronic "word of mouth" (aka high Google profile) to maintain the turnover.  As I am sure we all know if you put an item into your favourite search engine, the first items that appear are most often Ebay and Amazon offerings.   So does that mean that the way forward for these small suppliers is to advertise their products via these two platforms? 

It might be a good step forward for some, well Ebay more than Amazon. It depends on what they are selling. They will reach more people than the hundred or two that they meet at the big shows.

 

 

 

1 hour ago, Andy Hayter said:

 

 And what happens if that word of mouth drops off for whatever reason.  Can suppliers afford to stay away from exhibitions long term?  And getting orders in via the internet is one thing, getting market information is another.  As an example, knowing that your LNER bogie kits are selling well is one thing but this will not tell you if there is a demand foe NER, GCR GNR etc bogies as well.  Putting one of those on the market will longer term then be more of a shot in the dark.  Also as noted above, the  inability to discuss needs face to face will undoubtedly stop some potential customers from even starting a project (as in perhaps to install signals or whatever).

In a two day show the doors are typically only open for a dozen hours, twenty max. Small traders are either on their own or have one assistant. How many people can they typically serve in that time, how many can they have a meaningful conversation with advising purchases or ascertaining future needs? There is a danger here of us punters thinking that because we find it useful to tie up a trader for twenty minutes with a chat about what we'd really like to buy, that the trader also finds it useful