business

Ikea to hike prices by 9% due to supply chain woes

18 Comments

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18 Comments
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If price increases affect the cost of their oatmeal crisp cookies, there will be hell to pay!

7 ( +7 / -0 )

Really! somebody must have a huge plane that can rush 1,000s of flat packed furniture to a desperate Japan. Help us please…….

5 ( +5 / -0 )

Oil and gas are being used as weapons by certain countries. This weaponisation of resources is causing higher prices.

-2 ( +3 / -5 )

It will be over for IKEA as Japanese people don't like price increases.

1 ( +4 / -3 )

The ending of globalisation, higher energy costs and the suppression of the consumer economy will see price rises across the board, and not small ones. Some things will double or triple in price as additional sanctions, surcharges and import/export crimps are imposed, from Chinese ports to Brexit. There will also be increasing shortages of just about everything, including food. This is not a blip and is going to get much worse. Inflation is going to soar, with interest rates following it. This is politically driven by governments, not by Covid or natural economic or consumer behaviour.

2 ( +2 / -0 )

Great! Another reason not to shop there.

6 ( +6 / -0 )

This is not a blip and is going to get much worse. Inflation is going to soar, with interest rates following it. This is politically driven by governments, not by Covid or natural economic or consumer behaviour.

Inflation is a short term problem caused by pandemic driven disruptions in resource and manufactured goods flows and consumers shifting spending from currently and temporarily closed entertainment and dining venues to material goods. That spending profile is temporary and already shifting back to previous patters. Raw material and shipping prices are coming down too.

The decades long decline in the velocity of money actually accelerated in 2020, meaning those who hold money spent even less and held on to more. If you look at a graph of the velocity of money over time it went off a cliff in 2020 before resuming it's previous downward trend. Reducing money in circulation is deflationary as it reduces business activity and the decline overwhelmed all the stimulus spending that occurred the same year. This is a symptom of increasing market consolidation leading to oligopolies and monopolies, a trend not reduced by the pandemic, and one that allows money to be concentrated in fewer hands, negating much of the stimulus programs out there. If you look at a chart of M2 measure of money supply you see it increased greatly in 2020 before resuming its old trendline. What the two charts tell you is all that stimulus money wasn't spent. The inflation we see now is going to last another year and taper down. In three years, assuming the pandemic is under control for a time, we will be back to chewing our nails over deflation worries.

0 ( +2 / -2 )

Yes this is definitely not how Japanese deal with this problem.

The Japanese way would be to maintain the same price and make all the products 9% smaller.

4 ( +4 / -0 )

The Japanese way would be to maintain the same price and make all the products 9% smaller.

One sees that with packaged foods in the US. The formerly 1 pint milk bottle is down to 12oz, but the price is the same. Or instead of three bars of soap in a package you only get two now.

0 ( +1 / -1 )

Aw man, I have some big purchases I have been planning to make there in the spring. Guess I should have made them last year.

1 ( +1 / -0 )

Agree with GBR48. Inflation has always been the plan - and Covid provided the excuse. Governments cannot pay off debt with inflating it away. And governments cannot print new money by the ton and expect it to hold value forever. The timing is something nobody can predict, but extreme inflation is inevitable - and will likely come just when everyone says the economy is returning to normal.

2 ( +2 / -0 )

When Ikea can hike my pay 9% I'll buy from them again until they bring their prices down again.

Otherwise I'm just going to buy my crap from some other company that doesn't make their furniture assembly like transcribing a 300 piece puzzle into modern English.

1 ( +1 / -0 )

My bet is, another company will see this trend and not increase their prices and reap the reward of huge profits.

0 ( +1 / -1 )

Apparently customers have to put together the price hike themselves at the register.

1 ( +1 / -0 )

What happened to Japanese homemade/handmade culture society they were proud of? Now that they are buying cheap plastic board for modern look?

The only positive side is that teenagers/young people can able to learn about building/dismantling furnitures but still can't believe Ikea is in the centre of Tokyo.

-1 ( +0 / -1 )

Prishöjningar™ från IKEA

More palletable already!

0 ( +0 / -0 )

My bet is, another company will see this trend and not increase their prices and reap the reward of huge profits.

Good luck. The same rising transportation and raw material cost increases affect all businesses across the board. I would bet that Ikea has a greater ability to negotiate lower prices and is able to absorb a bit more in terms of rising transportation and material costs than most companies. In fact Ikea has chartered its own ships to move its products because the major shipping lines have recently become so costly and unreliable.

1 ( +1 / -0 )

What happened to Japanese homemade/handmade culture society they were proud of? Now that they are buying cheap plastic board for modern look?

When you lived on a farm with a big barn full of tools, a workbench and routinely made things for the farm one could do this. How does one do this in a typical big city apartment or condominium? Table saw, router, mill, etc all sitting in a tiny living room? The neighbors will love the noise. Sounds like a good way to get evicted.

1 ( +1 / -0 )

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