Dec 30, 2021 - Economy

Ikea raises prices as pandemic supply chain troubles continue

Ivana Saric

A man with a shopping trolley and a dog passes by the Ikea shop in Krakow, Poland — A man passes by the Ikea shop in Krakow, Poland. Photo: Jakub Porzycki/NurPhoto via Getty Images

Swedish furniture giant Ikea will raise its prices by an average of 9% across its global markets, Ingka Group, owner of most IKEA stores, announced in a press release Thursday.

Why it matters: The decision is yet another example of the effects of the pandemic's ongoing supply chain disruptions.

What they're saying: “During the pandemic, despite rising costs all around us, Ingka Group kept prices stable with the aim to keep prices as low as possible for customers,” Tolga Öncü, retail operations manager, said in the statement. “It was the right thing to do.”

“Unfortunately, now, for the first time since higher costs have begun to affect the global economy, we have to pass parts of those increased costs onto our customers,” Öncü added.

The big picture: Ikea's costs have been driven up by "significant transport and raw material constraints" and expects supply chain disruptions to continue into 2022, the statement notes.

Though prices will bump up by 9% on average, there will be local variations due to different inflationary pressures, such as area-specific supply chain and commodity issues, Ingka Group said.
Ikea had previously said that the supply chain disruptions had prompted it to lease more ships, buy containers, and re-route goods between warehouses to ameliorate disruptions, per Reuters.

Go deeper: Supply chain troubles aren't going anywhere

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Ikea raises prices as pandemic supply chain troubles continue

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