Ikea warns of price rises due to supply chain issues

Ikea has warned that its prices are set to rise due to supply chain issues.

Ikea parent-company Inter Ikea Group’s chief financial officer Martin van Dam told The Financial Times: “For FY22 (the year to the end of August 2022), we’re looking at supply disruptions still, we’re looking at raw material increases still, we’re looking at energy increases still.”

The executive said: “FY22 will not be easier than FY21, it will be more difficult . . . it eats away our margins in a massive way.”

The Swedish retail giant told the newspaper it will try to “absorb as much as possible” of these increased supply chain costs but that it would be “impossible” to do so indefinitely.

The news comes after IKEA reported record revenues of €41.9 billion in its financial year ending August. LINK

This represents a 6 per cent year-on-year increase compared to 2020 and a 1 per cent rise from the pre-pandemic 2019 fiscal year.

E-commerce continues to represent a growing part of the retailer’s business; IKEA’s e-commerce revenues grew by 73 per as consumers stayed home over the pandemic, and they now account for 26 per cent of the group’s total retail sales.

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