Ikea expects supply woes to spill into 2022

Ikea expects supply woes to spill into 2022

Ikea’s annual sales have surpassed pre-pandemic levels but global supply shortages that have pestered the Swedish furniture giant will persist well into 2022, its holding company said Thursday.

The group posted record turnover of 41.9 billion euros ($48.7 billion) between September 2020 and August 2021, a six percent jump from the previous fiscal year, according to Inter Ikea.

“It wasn’t easy. Keeping IKEA stores and warehouses stocked has been a challenge,” Inter Ikea said in a statement.

“During FY21 we saw a substantial drop in availability that we have not yet recovered from, and this will continue far into FY22 (which ends in August 2022).”

Suppliers have struggled to keep up with a surge in demand for goods as economies have reopened following lockdowns and restrictions imposed due to the Covid pandemic.

There are not enough containers to meet demand and goods are stuck in bottlenecks at major ports.

The disruptions have affected Ikea’s popular Pax wardrobe and Billy bookcase.

Despite the supply issues, Ingka Group, the main franchisee of Ikea that runs 378 of 422 stores worldwide, also reported a six percent rise in turnover, propelled by online shopping and a change in consumer habits as people have been forced to work from home.

Ingka CEO Jesper Brodin told AFP “it will take a while” for the global transport system to catch up.

As Covid has changed the way people do their jobs, his company is seeing higher demand for workplace furniture.

“Everything points out that people would like to work both from home and from the office,” Brodin said.

“It seems that the hybrid way is here to stay. I think we will probably continue to deliver a lot of products, both for people working from home and offices,” he said.(AFP)

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