Thursday, October 6

Ikea announces 9% price hikes due to inflation

Ingka Group, owner of most of the stores in Ikea, will raise the prices of its products by 9% on average in 2022 as a result of inflationary pressures in the markets where the group operates, as reported in a statement.

The company explains that this decision is also based on “changing economic conditions that affect all industries”, and cites inflation, supply chains and prices of raw materials as triggers. Likewise, it has clarified that 9% is an average of all the markets where it operates and that this variation will fluctuate depending on the situation in each country.

The director of operations ‘retail’ of Ikea Retail, Tolga Öncü, has defended this action as an insurance to fulfill the purpose of “creating a better daily life for many people”, in addition to safeguarding the competitiveness and resistance of the company. The group has maintained that it has always proposed a strategy of bringing the gross margin of the product to the lowest possible level in order to offer cheaper final prices. “We invested a large part of our net income in the business to keep prices as low as possible,” added Öncü.

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Ikea is committed to expanding the percentage of the range consisting of low and very low prices, with the ambition that more than half of the range is low priced. Additionally, Ingka Group will allocate to its Foundation the net income that is not reinvested in the business. Ikea registered a record turnover of 41,900 million euros at the end of its fiscal year, which ended in August, which is equivalent to an increase of 5.8% compared to the income recorded the previous year and 1.4% compared to the last exercise prior to the pandemic.

For its part, Ingka Group ended its fiscal year 2021 with investments of 3,200 million euros, which included items in physical stores, distribution networks and customer fulfillment, omnichannel transformation, digital customer experience, renewable energy, zero vehicles emissions and forestry.

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