The world’s biggest furniture store, IKEA, appears to have delivered a shock to some U.K. customers, after a survey showed the price of some items surging as much as 80% over a year due to biting inflation costs.
A ‘JOKKMOKK’ table and four chairs, with antique stain, would have set a consumer back £99 ($114) in 2021, but the price was up to £149 this past summer, and to £179 by October, according to a recent survey from U.K.-based Retail Week. That meant a 20% increase for 2022 and a total gain of 80%.
The markup on that table was at the top end of price hikes that were at least 22% higher in that time frame from last year for Sweden’s most popular retailer. Increases were seen for a wide range of furniture for the store that boasts 474 locations in 65 markets, with 70 in North America alone, but a dominant 278 in Europe.
Source: Retail Week
The Retail Week survey revealed such items as a 3-seat LANDSKRONA sofa had risen 20% alone in 2021. Price increases were also reported for IKEA stores in Canada by Daily Hive, an online news service.
The inflated costs came as the privately held retailer last week reported another record year of revenue, with full-year 2022 sales up 13% versus 2021 to €44.6 billion ($43.6 billion), from €41.9 billion a year ago.
The company directly addressed price hikes in the earnings release last week.
“IKEA prices remained relatively stable for several years. That gave us an advantage when competitors raised prices early in the pandemic. Unfortunately, we can’t ignore surging raw material and transport costs. Long-term, we remain committed to affordability for the many people around the world,” Inter IKEA Group CEO Jon Abrahamsson Ring, said in a press release.
IKEA announced at the start of 2022 that prices would rise an average 9% mostly for North America and Europe owing to pandemic-fueled shortages and shipping problems. Russia’s invasion of Ukraine in February has only caused more disruption for global shipping, and IKEA shut its stores in the country in March and continues to scale down its presence in the country.
As for U.S. price hikes, MarketWatch has reached out to the company for a comment. In the meantime, a straw poll found that U.S. consumers paid more for at least one item — the MELLTORP/ADDE table and four chairs (white, 125 cm) —compared to several other countries.
That set retails for $169 in the U.S., according to the IKEA website. It retails for 365 dirham ($99) in the United Arab Emirates, 15,990 ($106.86) in Japan, £97 ($109.14) in the U.K., €117 ($114) in Germany and HK$999.5 ($127) in Hong Kong.