Ikea India increases prices of some products as inflation bites

IKEA India has increased prices of some of its products due to rising inflation while also absorbing the high inflation costs on other products.

Susanne Pulver, chief executive officer (CEO) of IKEA India, said no one remains unaffected by what is happening in the world and it is the same for the company as well.

“We are trying to absorb as much as we can. We have also made some adjustments,” she said.

She added, “We were always striving to be affordable in order to protect lower prices in each segment, function and category.

We have done some adjustments where it’s possible, and we have protected (price points) to be affordable at lower prices.

The Swedish retailer is all set to open its fourth store in the country in Mumbai on Thursday. This will be the third store in the city. This store is spread across 72,000 sq ft and will offer over 7,000 home furnishing products.

Customers will be able to place orders for over 5,000 products that will be delivered to them, and they can buy 2,000 products directly from the stores.

However, with three stores in Mumbai, it is not the end of its expansion plans in the city.

Pulver said, “We can’t say we are done. We know people live very locally and it’s very tough to commute. We need to be accessible. Mumbai is a big city of 21 million and we think we can do more.” However, she did not elaborate on further expansion plans. With the launch of the third store in Mumbai, IKEA will have five operational stores in the country.

The retailer is looking to open more stores within cities it already has a presence in.

“I’m taking the next step and we are now reviewing our expansion strategy. We know we can do a lot more in the cities where we have opened — Hyderabad, Bangalore, and Mumbai. We are planning for Delhi and we have big projects. And then, we are looking into what can be beyond that. That is work in progress,” Pulver said.

While the company saw its losses widen in FY21, it is working on becoming profitable by increasing its local sourcing.

“We’re trying to take local sourcing from 20-30 per cent to 50 per cent,” Murali Iyer, chief financial officer (CFO) of IKEA India said.

Iyer added that these efforts by the company will make it profitable in the long-term while being affordable to the customer.

Iyer also said its stores have seen customers coming back to pre-Covid levels. It also witnessed strong response to its Bengaluru store and its e-commerce has also grown.

Its commerce contribution, which went up to 37 per cent during the pandemic, has now come down to 30 per cent. This comes as restrictions eased and customers started to shop offline.