Ikea hoists its prices and blames Covid supply pressures

Post-Christmas price rises of as much as 50% attributed to cost increases across supply chain

Ikea has increased the price of its flat-pack furniture by up to 50%, blaming supply chain costs caused by Covid-19, in a move that will further stoke growing concern about the rising cost of living.

After customers complained that prices appeared to have risen sharply after Christmas, the retailer said it was no longer able to absorb increased costs and was passing them on to consumers.

An Ikea spokesperson 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.”

Related: UK households warned of ‘year of the squeeze’ as cost of living soars

Archived versions of Ikea’s website from as recently as October showed significant price increases, including a Malm desk that has gone up from £99 to £150, a jump of more than 50%.

A Jokkmokk table with four chairs is also up 50%, from £99 to £149, compared with earlier this year. A Hemnes daybed has gone up from £215 to £279, a 30% rise, while an Alex nine-drawer unit increased 35% from £85 to £115, according to archived versions of the Ikea website from earlier this year.

A Kura children’s bed was up by 14% from £129 to £150, while Ikea’s Klippan sofa, one of the Swedish store’s most popular items, is £20 more expensive – a rise of 11% – at £199.

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Ikea confirmed that the company had raised prices across multiple countries and ranges. A spokesperson said: “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.

“Price increases vary but remain in line with what we are seeing globally at Ikea, which is approximately a 9% average increase across countries and the product range. 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.”

Ikea warned earlier this year that prices would rise, citing factors including bottlenecks in shipping raw materials from Asia to Europe.

The wider furniture industry has suffered significant delays, with the online furniture retailer Made.com saying that up to £45m-worth of orders have been delayed. It blamed a profit warning on factory shutdowns in Vietnam, clogged ports and extended shipping times.

Rising prices at Ikea come amid broader concern about the cost of living, after UK inflation hit a 10-year high of 5.1% in November.

Soaring energy bills and rising taxes prompted 2022 to be dubbed the “year of the squeeze” by a thinktank report published this week.