Ikea Facing Long-Term Stock Shortage

Home furnishing retailer Ikea said Thursday (Oct. 14) the ongoing supply chain bottleneck means it’s likely to face stock shortages for another year, according to a report in the Financial Times.

“We actually foresee that the availability and raw materials challenge will continue for the better part, if not the whole, of [the financial year to the end of August],” Jon Abrahamsson Ring, chief executive of Inter Ikea, owner of the Ikea brand, told FT. “This is here for a longer period than we thought of at the beginning of the crisis.”

The pandemic has forced Ikea to transform itself and accelerated its business plans, as shown by a 6% increase in sales through the end of August to a record level of almost $48.6 billion, including online sales almost doubled from a year earlier. eCommerce was about 30% of Ikea’s overall sales, up from 18% in 2020 and 7% two years ago.

“This situation has given us a boost like never before to speed up our transformation,” said Jesper Brodin, chief executive of the biggest Ikea franchisee Ingka, in a separate interview with FT.

Ikea is likely to continue using trains to transport goods for its products from Asia to Europe during the supply chain bottleneck, Ring said.

“I don’t see a substantial change or shift in how we do our supply chain or sourcing,” he said. “We will continue to work very closely with a focused number of suppliers.”

Related: Ikea To Pilot Furniture Buyback, Secondhand Sales

In August, Ikea began piloting a furniture buyback and resale program in the Philadelphia suburb of Conshohocken, with plans to roll it out in other markets as well.

Loyalty customers will be able to sell gently used Ikea furniture in exchange for store credit through the buyback program, with these items then available for resale in Ikea’s “as-is” section at discounted prices. Any customer can join the loyalty program for free.

Ikea launched its global buyback program in Great Britain last year and it’s also in 26 other countries, including Australia, Canada, France, Germany, Italy, Japan and Russia.