IKEA Group to raise prices by 9% in 2022

IKEA Group to raise prices by 9% in 2022
IKEA Group to raise prices by 9% in 2022

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The Swedish furniture group IKEA announced Thursday that it will have to increase its prices by 9% in 2022 in the face of the problems of shortages in basic materials and the high cost of transportation in the global economy.

“Unfortunately, for the first time since more high costs began to affect the global economy, we will have to charge our customers some cost increases,” said the holding company Ingka Group, which oversees more than 90% of IKEA stores worldwide.

“Like many other industries, IKEA continues to face significant restrictions on transportation and basic materials that are driving up costs without expecting that to stop in the near future. Disruptions are expected for most of 2022,” the Netherlands-based company added.

Ingka said the main cost increases associated with transportation and supply prices are “especially being felt in North America and Europe”.

“The rate of increase (in costs) at INGKA Group will be 9% at the global level, with prices varying according to countries and product groups, which reflects domestic inflationary pressures,” the holding company said.

So far, the IKEA Group has absorbed the significant costs resulting from major logistical tensions arising in particular from the recovery in demand at the end of the first phase of the pandemic.

The announcement comes against the backdrop of a sharp acceleration in inflation worldwide, bolstered by a deep disruption in distribution chains and a shortage of commodities essential to international trade.

The phenomenon was accompanied by an increase in the prices of basic materials (wood, copper and steel) and energy (fuel, gas and electricity).

In the euro area, the inflation rate reached 4.9 percent in the one year to November, a record high since the adoption of the single currency in 1999. In the United States, the price increase reached 6.8 percent last month compared to November 2020, its highest level 39 years ago.

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