Ikea raises prices by up to 80% in UK as transport and raw material costs surge

The retailer says it is not immune from the ongoing global economic headwinds

Ikea has raised prices on some of its most popular item as supply issues persist. Photo: Ikea
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Swedish retail company Ikea has increased prices in the UK by up to 80 per cent on some products, research shows.

The company blamed “surging raw material and transport costs”, as well as the war in Ukraine for the rise in prices.

It increased prices of items such as the Jokkmokk dining table and chairs, which went up by 80 per cent to £179 ($200), from £99, over the past year.

The research, which was carried out by UK industry publication Retail Week, found that the prices of other furniture items rose significantly.

The price of Ikea's Glostad two-seat sofa was raised to £150 in October 2022, from £90 in 2021, an increase of 66 per cent.

Analysis showed that the Brimnes chest of four drawers rose 47 per cent to £125, from £85.

The price of the Fyresdal day-bed frame increased to £219, from £150, while the Slattum upholstered bed frame went up to £189, from £129, an increase of 46 per cent for both items.

“We offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible are able to afford them. This remains our focus today and in the future,” Ikea told Retail Week.

“However, we are not immune to the macroeconomic developments that businesses, retailers and the public are currently facing, from the increased cost of materials and transportation to the war in Ukraine and inflation.

“It is critical that we are financially resilient for the long term to ensure our longevity as a business and employer, and we have had to adjust our prices to reflect this increased cost base.

“Our approach during this period has sought to protect the prices of our most-loved and lowest-priced products and families.”

Many countries are grappling with soaring inflation, including the UK which on Wednesday reported that headline inflation had increased to 10.1 per cent.

Despite rising costs and supply chain disruption brought about by Covid-19 and the war in Ukraine, the company said it had an “exceptional year” as it released its financial data for 2022.

It reported retail sales of €39.5bn this financial year, which ran from September 1, 2021, to August 31. That was a 5.6 per cent increase from the previous year’s sales of €37.4bn.

However, inflation and supply chain issues led to rising costs and higher prices, meaning sales quantities were down, although they cost more and there were struggles to keep shelves full. Online sales were down 10 per cent from the 2021 fiscal year.

Additionally, Ikea ’s exit from Russia and Moscow’s ally Belarus because of the Ukraine war forced the company to let go of about 10,000 of its 15,000 workers in both countries.

“We lived up to the challenge — achieving solid performance in a disrupted environment, making tough decisions, while always keeping sight of the needs and dreams of the many,” said Jesper Brodin, chief executive of holding company Ingka Group, which manages most of Ikea’s stores.

“Uncertainties will continue be part of our lives in the coming years.”

Anna Hallqvist Gedda, chief financial officer of Ikea Sweden, told Swedish news agency TT that “the fact that more people are chasing lower prices in expensive times seems to have benefitted Ikea.”

Updated: October 19, 2022, 11:04 AM