According to ECO, the average increase will be 9% and the decision is mainly due to the increase in the prices of raw materials and transport, as well as other constraints in the supply chain.
Earlier this week, ECO had questioned IKEA Portugal about possible price increases in the Portuguese market. At issue were signs of significant increases in the prices of some products such as chairs and sofas.
“We are not immune to the macroeconomic developments that are affecting businesses, retailers and society at large. The pandemic brought new challenges to the IKEA business, and as a result of higher production and distribution costs, we faced the need to raise, for the first time, the prices of our range, mainly to ensure legal requirements in our market, avoiding having sales prices below cost prices”, aka dumping, the official source of IKEA Portugal, told ECO.
Without mentioning the average price increase in the national market, the same source detailed that "the amount of products affected in each country will vary, as this situation is also dependent on local inflation pressures, raw material and supply chain of each market”.
In a statement, Tolga Öncü, director of retail operations at IKEA, said: “Unfortunately, now, for the first time since higher costs began to affect the global economy, we have to transfer parts of these increased costs to our customers.”
The company signals the ambition that more than half of the IKEA product range should be low-priced. However, it saw the need to raise prices to safeguard competitiveness and resilience, even though affordability is one of the cornerstones of the business.
The group that owns the world's largest furniture brand points out that it has always kept the gross margin as low as possible, in order to keep prices low, which turns out not to be enough. “We invest a large part of our net income back into the business to keep prices as low as possible, particularly for the lower price [product] range, ensuring that as many people as possible continue to be able to afford IKEA.” mentioned Öncü.