IKEA set to raise its prices due to supply chain trouble

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Furniture company IKEA has admitted that it has been facing various supply chain challenges.

The company has said that increasing transport and raw materials constraints are driving up costs in general.

To support its customers to adapt to the current state of the world, with working from home becoming the norm, Ingka Group made ‘significant’ investments in physical and online retail operations focused on meeting changing demands.

Speaking of the company’s increased costs due to ongoing supply chain constraints, Tolga Öncü, Retail Operations Manager at IKEA Retail at Ingka Group said: “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.

Prices will are set to go up across Ingka Group markets, reflecting the changing economic conditions affecting all industries.

The average of the increase in Ingka Group is around 9% globally, with variations across the company’s countries and the range, to reflect “localised inflationary pressures”, namely, supply chain shortages.

“We are taking this difficult step right now to ensure we can live up to our purpose to create a better everyday life for the many people, and to safeguard our competitiveness and the resilience of our company,” Öncü added.

However, the company is intending on improving its delivery standards through shortening lead times and importantly making delivery more sustainable by routing more fulfilment through blue box stores rather than only customer distribution centres.

IKEA’s commitment is to become climate conscious by 2030, and Ingka Group has committed to invest an additional €4 billion across the coming years into renewable energy, in addition to €2.5 billion in investments in the past decade.

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