Furniture giant IKEA is increasing its prices by an average of 9% in 2022 due to ongoing global supply chain disruptions.
Ingka Group, which owns and operates 392 IKEA stores worldwide, said the price hike reflected “changing economic conditions affecting all industries”.
Prices are set to rise in all markets but will vary to reflect local inflationary pressures, including commodity and supply chain issues, the Ingka Group said.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
In fiscal 2021, the company kept prices stable despite rising costs during the pandemic, Tolga Öncü, retail operations manager at IKEA Retail, said in a statement.
In addition, IKEA franchisor Inter IKEA Group has absorbed € 250 million ($ 282.4 million) in supply chain costs “to mitigate the impact on retail prices.”
However, Ingka Group said the retailer is still facing “significant shipping and raw material restrictions that are driving costs up with no disruption any time soon.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Ingka Group estimates the disruption will persist “well into 2022” and that North America and Europe will face the largest cost increases.
“Unfortunately, for the first time since the higher costs have had an impact on the global economy, we have to pass some of these increased costs on to our customers,” said Öncü.
In the meantime, the company continues to work to mitigate the impact of supply chain disruptions on its operations as much as possible by deploying additional ships and loaders to ensure stores are in stock.
“Our intention is to give back to the customer every drop in purchase price we receive,” added Öncü.