That prediction was made by CEO Jon Abrahamsson Ring of Inter Ikea, the global franchisor of the furniture store group. The company’s biggest challenge is getting goods shipped from China. According to him, the company does not want to pass on the extra costs for, among other things, transport to customers.
Like other companies, Ikea is struggling with a shortage of transport containers and problems in the ports that are disrupting logistics. The problems have previously led to warnings about slower sales growth and higher costs at several companies, including Swedish clothing retailer Hennes & Mauritz (H&M) and British online retailer Asos.
To cope with the situation, Ikea had to prioritize, according to Abrahamsson Ring. The product range is therefore focused on the most popular products, he said. “I also don’t think we will be out of trouble in the current financial year.” Ikea’s fiscal year runs through August next year. “This is a very big challenge for the entire supply infrastructure,” said the Ikea executive.
Ikea closed the past financial year with record turnover. The recovery followed a year in which sales fell for the first time, mainly as a result of store closures due to the corona pandemic.
The price spike for transport and raw materials in recent months has led to higher costs. The company plans to absorb these additional costs itself rather than passing it on to Ikea customers. According to Abrahamsson Ring, it is important to make Ikea even more affordable. The company plans to get more of its revenue from lower-priced products, he said.
Ikea has also taken other measures to get products to its stores. For example, the company rents containers itself and looks at alternative transport options, such as by rail.
Ikea sees problems with stocks piling up until the middle of next year | Financial
Source link Ikea sees problems with stocks piling up until the middle of next year | Financial