Ikea to unwind 2022 prices increase

IKEA is making investments to lower prices on select products in several countries, in an effort to unwind price increases it implemented in 2022, according to Reuters.

The main IKEA retailer stated that it has reduced expenses and is witnessing a decline in the price of raw materials, which will allow it to lower the prices of certain products and increase sales volumes.

Price reductions have already been announced by the retailer in Sweden, the UK, and Germany.

“Every country is sitting and looking at where are the opportunities for us to, by lowering the prices, sell more pieces,” Tolga Oncu, Ingka Retail Manager at Ingka Group, the biggest owner of IKEA stores told Reuters.

“When you lower the price you also need to see a volume increase.”

The Swedish company is already selling cut-priced products in some countries, Tolga Oncu added.

As of February 1, Ingka Group is reducing the prices of 2,600 products in Belgium. It invested 55 million euros ($59.53 million) to lower prices on over 1,500 products in Canada. Hundreds of products will also see price reductions in India.

By the end of the following year, Ingka Group stated, prices are expected to return to their pre-pandemic “inflation-adjusted” levels.

Notably, From September to November, Ingka Group invested more than 1 billion euros in price reductions throughout its markets.

IKEA’s intentions to reduce prices are not expected to be impacted by Red Sea disruptions to global freight, which have increased shipping rates, according to Oncu.

“So far when it comes to the Red Sea disruptions, with the facts we know today it is not impacting the pricing direction that we have at IKEA.”

Ingka Group is the main global franchisee of IKEA. The brand is owned by a different company, Inter Ikea, which manufactures all IKEA products.

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