IKEA eyes price cuts as inflation eases
STORY: IKEA has been raising prices to cope with soaring costs in its supply chain.
Now it’s hoping to put that process into reverse.
The furniture giant says it’s looking at price cuts as some of its input costs start to ease.
That’s according to Tolga Oncu, a senior official at Ingka Group, which owns most IKEA stores.
He spoke to Reuters at one branch in Mumbai, India:
"We are optimistic to continue focusing on lowering the prices where we can and also in some commodities we start seeing a plateau or even a start of a decrease again. So, I am quite optimistic in going forward.”
Like other firms, IKEA has faced soaring costs.
They were driven up by factors including the conflict in Ukraine, and global supply chain snags.
But Oncu says the price of some raw materials, such as metal, is now coming down again.
Shipping costs have also eased.
With global consumers pressed by a cost-of-living crisis, Oncu says IKEA looks well placed:
"Everybody is in the pursuit of well-designed, well-functioning home furnishing products at an affordable price and I think our business model to really focusing on lowering the prices and making sure we are even more affordable is paying off in times like this.”
India is one of IKEA’s fastest growing markets.
As in some other countries, it’s now opening small city branches there, as well as its famous out-of-town megastores.
Last week, Ingka Group reported a 9% jump in annual profits, driven by price increases.
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