The days of peeling out of the Ikea parking lot loaded to the roof with home furnishings and down only a hundred bucks are officially over: shopping at the budget furniture giant likely looks a whole lot different now, after the company hiked prices for some of its items up to 80% due to surging material and transport costs.
A recent research report by business intelligence website Retail Week found that Ikea sharply raised prices for its mediocre furniture over the past year, as global inflation, pandemic-related supply chain disruptions, supply shortages, and the company’s exit from Russia made it increasingly difficult to keep its shelves full whilst not passing the added costs onto consumers. In the UK, Ikea’s popular Jokkmokk dining table and chairs set went up from £99 in 2021 to £179 in October 2022, so not only will you have to assemble the table yourself, you will also pay 80% more for it.
Similarly, the price of the Glostad two-seat sofa jumped 66% from a year ago to £150 in October, while the Brimnes chest went up 47% from £85 during the same period. Ikea’s Fyresdal day-bed frame and the Slattum upholstered bed frame both jumped 46% to £219 and £189, respectively, over the past year. “We are not immune to the macro-economic developments that businesses, retailers and the public are currently facing, from the increased cost of materials and transportation to the war in Ukraine and inflation,” Ikea explained in a statement.
Ikea’s annual financial results showed a record 6.5% increase in retail sales for the period ending on August 31, 2022. “Inflation and supply chain issues impacted FY22 sales, and led to rising costs and higher prices. That means sales have grown in money, but sales quantities have not kept up,” Ikea explained.
Information for this briefing was found via Retail Week and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
