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Global Economy

IKEA: Higher prices in the "impossible furniture store"

As announced, the Swedish furniture store IKEA is increasing its prices. According to IKEA, the furniture in its stores around the world will increase in price by an average of 9 percent to offset the significant transport and raw material costs of the Ingka Group, which owns and operates most of the IKEA stores worldwide.

However, the British Guardian estimates that some prices have risen by up to 50 percent since Christmas. For example, instead of £90 (EUR 107.40), a Malm desk now costs £150 (EUR 179), according to archive scans from the IKEA website.

Like many tight-margin companies, the world's largest furniture seller is struggling to absorb the higher costs due to ongoing global supply chain problems because of the Covid pandemic.

"Unfortunately, for the first time since higher costs have impacted the global economy, we now have to pass some of these increased costs on to our customers," said Tolga Öncü, Retail Manager at IKEA Retail.

This step will ensure IKEA's "competitiveness and resilience". However, he adds that "affordability will always be a cornerstone for us".

In Germany, IKEA reported a slight decline in sales of 3.2 percent in the past financial year (until the end of August). A total of 5.3 billion euros were implemented.

Despite rising costs during the pandemic, Ikea stores had kept prices largely stable.

However, because raw material and shipping prices continued to rise, the company said it was no longer able to make up for these losses.

su, The Guardian

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