What about the IKEA increases in Greece and in the world

By George Lampiris

Ikea’s report on global growth of 9% follows significant increases in shipping and raw material costs, with the world’s largest furniture chain seeking to absorb the recent supply chain shocks . In fact, the goal of IKEA through this report for increases worldwide is to absorb the cost of transportation and raw materials borne by Ingka Group, which owns and operates most IKEA stores worldwide.

Increases in specific codes and not horizontally

In Greece, things are partly different, without this meaning that there will be no increase in IKEA stores located in our country. It is noted that the Fourli group operates as a master franchisee through Inter IKEA Systems BV, which is the franchisor and owner of the concept and the IKEA brand worldwide. At the center of Inter IKEA’s responsibility is the development of the brand in new markets as well as the cooperation with the respective licensees in every market of the world. One of them is the Fourlis group, which operates as a master franchisee in Greece, Cyprus and Bulgaria. Regarding the formation of the landscape of increases in the Greek market, sources close to the Fourlis group report to Capital that in our country the increases do not exceed 5%. This is a percentage, which in any case will not be imposed on the entire code list, but as they point out on some selected codes and not horizontally on the entire price list. They even add that the rate of increase in prices would be significantly higher than the above, however part of the increased costs is absorbed by Inter IKEA and part by Housemarket SA. which belongs to the Fourlis group and manages the brand of the furniture company in Greece, Cyprus and Bulgaria. This has the effect of limiting price increases to a low single-digit rate.

The same sources point out that the increases that have not yet passed in the network of IKEA stores in our country, but are something that is going to happen in the near future, are driven by increased costs in transport, energy, while at the same time attributing part of the pressure the existing furniture chain and rent inflation. At the same time, they point out that the percentage of 5% that IKEA will spend on its prices will be lower compared to the market average, which, as they emphasize, is moving at a high single-digit percentage. It should be noted that both in Greece and internationally IKEA had not made price increases until now and during the pandemic, something that due to the conditions affecting the global economy will do so from now on.

It should also be noted that IKEA, as reported in early December on the sidelines of the presentation of the new store at The Mall Athens by the president of the Fourlis group, Vassilis Fourlis, had code shortages of up to 14% of the total product range following shortages of raw materials, increased demand and successive strikes in the port of Piraeus.