That was great (& like you I was shocked by the prices!)
I'm not sure how Hamley's get away with it - they don't get much of my money, but it's fun to browse if I'm in the area.
An example of Hamley's "Inflation":
3268 Knights Empire castle - Hamleys £130 (
reduced from £140) - Playmobil Online sales £120 - Toys'R'Us £110 - Bentalls £100 - John Lewis £70.
It's possible that John Lewis had reduced it to clear (it wasn't labelled as such, but it was the last one on the shelf), but generally I've found their prices (and customer service) to be the best. It's a shame they don't stock Specials.