Ikea is hiking its prices by nearly 10% as the supply chain crisis continues to disrupt its operations
Ikeais raising its prices by 9% on average due to supply chainchallenges.
- A spokesperson told Insider the impact will be bigger in North America.
Ikea is hiking prices by an average of nearly 10%, due to supply chain bottlenecks and the surging cost of materials amid the pandemic.
The spokesperson said: "Since the start of the pandemic, IKEA has managed to absorb the significant cost increases experienced across the supply chain while keeping prices as low and stable as we possibly can. Higher costs have affected the global economy, and like many retailers, we have had to raise our prices to mitigate the impact on our business."
Although the increases vary, the Ikea spokesperson said they remain in line with what the company has seen globally, which is approximately a 9% average.
They said the relative impact will be bigger in North America, due to operational, transport and logistics costs, but did not provide further detail.
However, The Guardian, which first reported the news, estimates that some prices have increased by as much as 50% since Christmas. For example, a Malm desk increased from £90 ($121) to £150 ($202), according to archive scans of Ikea's website.
Ikea told Insider it would continue to monitor raw material and supply chain costs, as well as identify long-term solutions in pricing decisions.
"This is a constantly evolving situation, and we are not immune to the macro-economic developments facing businesses, retailers, and the public at large," the spokesperson said.
Companies around the world have been warning of supply chain challenges since the onset of COVID-19. A combination of labor shortages, factory closures, increased consumer demand, and bottlenecks at ports have forced retailers to rethink their supply chains and raise prices, in some cases.
In October, Inter Ikea Group, which owns the Ikea brand, warned in its annual report that challenges would last well into 2022 and that the resulting costs may need to be passed onto customers.
Chief executive Jon Abrahamsson Ring said in an interview with Reuters that exporting goods from China, where around a quarter of its products are manufactured, was the biggest challenge facing the group.
Ikea has 463 stores worldwide, including 68 in North America.
It has typically been able to beat its competitors on price by building its model around its flatpacked furniture, which enabled it to save costs on transportation and logistics.
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