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Furniture giant IKEA raises prices as supply chain woes persist

Stock MarketsDec 30, 2021 12:45PM ET
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2/2 © Reuters. FILE PHOTO: The company's logo is seen outside of an IKEA Group store in Saint-Herblain near Nantes, France, March 22, 2021. REUTERS/Stephane Mahe/File Photo 2/2

STOCKHOLM (Reuters) - The world's biggest furniture brand IKEA is raising prices by an average of 9% as it faces increasing costs in transport and raw materials, the owner of most of its stores worldwide said on Thursday.

IKEA had previously said it was leasing more ships, buying containers and re-routing goods between warehouses to mitigate supply chain disruptions but said it was now having to pass the costs onto customers, as it expected the turbulence to continue.

Ingka Group said prices would go up around 9% on average across its markets, with local variations reflecting different inflationary pressures, including commodity and the supply chain issues.

"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," Retail Operations Manager Tolga Öncü said.

"IKEA continues to face significant transport and raw material constraints driving up costs, with no anticipated break in the foreseeable future," the group said in a statement, adding it expected disruptions to continue "far into 2022".

Ingka Group has seen strong demand during the pandemic as people stayed at home more.

It operates through a franchise system, with Ingka the main franchisee to brand owner Inter IKEA with 392 stores including city stores, and 73 smaller store formats.

Furniture giant IKEA raises prices as supply chain woes persist
 

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