Brexit: Expert hits out at 'lazy' supply chain criticism
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A number of customers have taken to Twitter to complain about the sudden increases. In response to one complaint over a £20 increase for a play kitchen, IKEA’s UK Support account tweeted: “Unfortunately, there has been a significant increase in costs across the supply chain, including in raw materials, transport and logistics. As this is still ongoing it is necessary to increase prices across many of our products.” Based on archived IKEA webpages a Malm desk has risen from £99 in October to £150 today.
Meanwhile a Hemnes bookcase has risen from £129 earlier in the year to £150 now, while the Micke desk has gone from £89 to £115.
A Melltorp table and chair set has risen from £80 to £93 since the start of the year while a Malm bed has gone from £129 to £179 since October.
Some prices increases have been very recent with one Twitter user complaining the cost of a Lagkapten table top went from £15 to £20 in their basket overnight.
An IKEA spokesperson told Express.co.uk: “Since the start of the pandemic, IKEA has managed to absorb the significant cost increases experienced across the supply chain while keeping prices as low and stable as we possibly can.
“Now, like many other retailers, we have had to raise our prices to mitigate the impact on our business.
“As prices are influenced not only by the raw material prices but also by transportation, logistical costs and local market conditions, price adjustments differ from country to country.
“Whilst individual price increases in the UK vary, the average increase is 10%, in line with the global average of 9%.
“Affordability remains at the heart of our business, and our focus will always be on continuing to offer quality, sustainable home furnishings at an affordable price for the many people.”
In its results for the 2021 financial year IKEA previously warned it had suffered a fall in net profits of €300m (£251.49m) due to a squeeze on margins.
IKEA is unlikely to be alone in raising prices with supply chain issues and rising manufacturing and materials costs continuing to prove a problem for many businesses.
In a briefing note analysts at Saxo Bank predicted supply chain disruption would remain, adding: “Most companies cannot absorb the costs anymore and will pass them on to consumers.”
Chief Executive of the British Retail Consortium Helen Dickinson warned: “There are clear signs that pressure from rising transport costs, higher energy and commodity prices, and ongoing labour shortages is starting to filter through to consumer prices.
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“A BRC survey of retailers showed that three in five expected prices to go up by the end of the year.
“Government can reduce some of these cost pressures by finding a long-term solution to the current labour shortages, particularly for HGV drivers, which are pushing up costs across the supply chain.”
As well as rising retail prices consumers are also bracing for a higher cost of living generally next year.
This week think tank the Resolution Foundation branded 2022 the ‘year of the squeeze’ with increases to the energy price cap and a hike in National Insurance both expected to hit in April.
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