IKEA to Raise Prices Due to Supply Chain Disruptions and Inflation

As a result of supply chain disruptions and higher raw material costs, IKEA will hike its prices for the foreseeable future, the company confirmed Thursday.

According to Ingka Group, the beloved budget furniture retailer’s prices will rise by an average of 9% in stores around the world, with differences in some areas due to “localized inflationary pressures.” The decision to raise pricing was based on “significant transportation and raw material constraints driving up costs,” according to the company.

“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,” said Tolga Öncü, retail operations manager at IKEA.

“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.

IKEA stated that it will continue to provide low prices on more than half of its product lines. IKEA’s operations would be disrupted and costs will rise “far into 2022,” according to the company.

The store is attempting to resolve supply chain difficulties. As part of its attempts to avoid shipping problems, the store previously stated that it is hiring more vessels and containers.

If the situation improves, the company said it will alter prices, however forecasting is “challenging given current instability and inflation across markets.

“Our intention is to give back to the customer any decrease in purchase prices we get,” Öncü added.

The Ingka Group is the world’s largest owner and operator of IKEA stores. According to IKEA’s website, the company has 392 locations worldwide.

Inflation has soared due to increased product demand and global supply chain bottlenecks. As a result, Americans are paying more for common necessities like food and gasoline.

November 2021 marked the largest increase in the Consumer Price Index since 1982, rising 6.8% compared to November 2021 one year earlier.

Several retailers have raised prices recently including IKEA. In November, Dollar Tree announced price hikes for most of its assortment to $1.25, though company officials claimed it wasn’t a response to market conditions.