Ikea’s parent company has warned that profits will fall unless it increases prices.
Inter Ikea saw profits fall 17% to €1.4bn in the year to the end of August despite a 6% increase in sales to a record €41.9bn.
‘For the 2022 financial year, we’re looking at supply disruptions still, we’re looking at raw material increases still, we’re looking at energy increases still,’ Martin van Dam, Inter Ikea cfo told the Financial Times.
‘It will be more difficult… it eats away our margins in a massive way.’
The group has not increased prices since 2019, but van Dam indicated increases were unavoidable. He says shoppers may not feel the full increases depending on how much franchisees absorb.
‘We really want to stay as low-priced as possible. We can’t let this period of time make us different. We want to absorb as much as possible these price increases. But there comes a moment in time that it becomes impossible for us to hold it back any more. It’s something we don’t like,’ he says.
Limited stock was letting down customers he added.
