The impact of COVID-19 on supply chains is causing Ikea to raise its prices.
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- Ikea is raising its prices due to supply chain challenges and the rising cost of raw materials.
- A spokesperson told The Guardian that prices would increase 9% on average.
- Companies around the world have been warning of supply chain challenges since the onset of COVID-19.
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 Swedish furniture maker has built a reputation for its economical yet stylish flatpack furniture, but a spokesperson told The Guardian that since Christmas it had raised prices in multiple countries.
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. Now, like many other 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.
The Guardian, however, estimates that some prices have increased by as much as 50%. For example, a Malm desk increased from £90 ($121) to £150 ($202), according to archive scans of Ikea’s website.
Ikea is yet to respond to Insider’s approach for comment.
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.
