IKEA Philippines says 'balancing' prices as inflation quickens

Jessica Fenol, ABS-CBN News

Posted at Nov 11 2022 03:56 PM

The world's largest IKEA store opens to the public in Pasay City on Nov. 25, 2021. Mark Demayo, ABS-CBN News/File
The world's largest IKEA store opens to the public in Pasay City on Nov. 25, 2021. Mark Demayo, ABS-CBN News/File

MANILA — IKEA Philippines has made adjustments to the prices of several items in the form of reductions and hikes amid rising inflation and the impact of continued global headwinds, its country store manager Georg Platzer said Friday.

Adjustments took effect on Nov. 10, a few days before the Swedish furniture maker is set to celebrate the first anniversary of its largest store located in Pasay City. 

IKEA was prompted to increase prices for some products due to higher energy costs, shipping, inflation as well as the impact of currency volatility, Platzer told ABS-CBN News.

"While we want to prevent any price increase, as mentioned, there are many uncontrollable external factors that forced us to do so...all these affected production cost and it really affected our business goals," Platzer said.

Some of the prices for items under the dinnerware range such as the IKEA 365+ rose by around 3 to 6 percent, cushion covers such as SANELA increased by 9 percent, while artificial plants like FEJKA now retail higher by 17 percent, the official shared.

But Platzer said they've also decided to reduce prices of items they deem "very relevant" to Filipinos since this "will hopefully enable the many to still get hold of these IKEA products."

"To ensure we are still true to our vision while we support our business goals, we decided to sacrifice our margins in some products to continue to provide affordable product range to the many," he said.

"It’s our vision of creating a better life for the many that’s really prompting us to try to find solutions or balance from all these uncontrollable price movement in the market," he added.

Some sustainable products' prices were cut by up to 50 percent, in a bid to promote a sustainable lifestyle at home, Platzer said. These include items made of sustainable materials such as bamboo.

Parents can also avail of reduced prices for select items in IKEA's children's range such as soft toys in the BLAVINGAD collection, among others, which were slashed by up to 40 percent.

Platzer said top sellers were also discounted including the OFTAST plates, which are down by 30 percent, among others. 

Almost half a million of the 25 cm OFTAST plate alone were sold since the store opened last year, Platzer said.

IKEA Philippines, which opened in November 2021, earlier said it generated P6.4 billion in sales during its first year, which Platzer said was within expectations despite coinciding with the COVID-19 pandemic. 

Moving forward, IKEA Philippines said it is betting on e-commerce to drive its growth as consumers' behavior shift in the new normal.
This is possible with expanded and enhanced delivery and assembly services, Platzer said.

Storage solutions can also boost its growth as Filipinos are known to commit to decluttering, IKEA Philippines said, citing an internal study.

Platzer said opening a new branch is on the table but for now, the focus is on enhancing its store and e-commerce operations.


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