Finance

IKEA raises prices, up 9 percent

“A percentage means little, because we have more than 10,000 products in our range in widely differing price ranges,” says a spokeswoman. The company looks at what the competition is doing for each product and product family.

News of the price hike came out after an IKEA UK customer service representative tweeted about it.

Prices

For example, according to The Guardian, which compared prices, the Malm Desk, a small desk, cost £99 in October and is now £150, a price increase of more than fifty percent. The price of a Kura cot rose by 14 percent and that of the Klippan sofa, one of the most popular sofas in the world, rose by 11 percent in the UK. However, IKEA Netherlands has different prices.

Companies worldwide are suffering from the problems in logistics that arose during the corona crisis. Production in Asia came to a standstill, followed by the delay caused by the Ever Given stranded in the Suez Canal.

Increasing demand

IKEA sees the demand for products increasing at the same time, it already announced in September. Because we can’t spend our money on a night out or traveling far, we buy furniture and kitchens. The compartments in the warehouse where customers can normally collect their items themselves are increasingly empty, despite extra effort.

As a result, some products disappeared from the range at least for a period of time. At the time, the company expected that it would not be necessary to pass on the higher raw material prices to consumers.

Problems are far from over

IKEA said in October that it is confident that the supply chain problems and the associated shortages in stocks will continue at least until the middle of next year.

The company’s biggest challenge is getting goods shipped from China. At the time, the company did not want to pass on the extra costs for, among other things, transport to customers.

IKEA is now forced to raise prices because it is “not immune to macroeconomic developments,” the spokeswoman said.

Action

IKEA is not the only company that will partly increase prices. Store chain Action, which gets about half of all items from China, also reported this summer that the increased prices of container transport and raw materials will lead to price increases in the entire retail sector.

“For Action, we try to resolve this situation as best as possible together with our suppliers,” a spokesperson said at the time. “Our scale and volume allow us to absorb quite a bit of this impact, and our large inventories help with that.”

Action ‘will always continue to offer the lowest price in the market’, he stated, but ‘in time this situation may also lead to changing prices for a number of Action’s products’.

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