IKEA cites pandemic supply issues for 2022 price hike

IKEA has announced it will increase prices on the majority of its products in 2022, citing pandemic supply issues for the price hike.

The furniture retailer said prices will increase by an average of 9% in stores nationwide (including in Australia) to ‘offset rising transport and raw material costs’ according to a statement released by Ingka Group, which owns and operates most IKEA stores worldwide.

IKEA has long been synonymous with low prices thanks to its unique DIY offering of flat-pack furniture, minimalist homewares, and virtually staff-free showrooms. The Swedish giant kept prices relatively stable during the pandemic and even launched a second-hand furniture buy-back scheme to promote sustainably, but as commodity and shipping prices soared, the company said it was no longer able to operate with its current pricing model without damage to its bottom line.

Inside IKEA store

IKEA Retail Operations Manager, Tolga Oncu, 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 on to our customers.

“We invest a large part of our net income back into the business to keep prices as low as possible, particularly for the lowest priced range, ensuring that as many people as possible continue to afford IKEA.”

Supply and demand during the pandemic

The retailer said it has seen unprecedented demand for home-related products since the pandemic, including home-office equipment, outdoor furniture, and storage solutions. IKEA said the company has struggled to meet demand at times and is trying to mitigate shipping delays by charting extra ships and loaders.

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