IKEA Struggles to Stock Shelves Amid Supply-Chain Woes

IKEA, the world’s largest furniture seller, said a significant share of its products are missing from store shelves around the world, with many of its flatpacks and houseware items sitting idle at warehouses waiting for trucks.

The problem “is very global from where we sit,” said Tolga Öncü, retail operations manager at Ingka Holding B.V., the family-controlled retailer’s main holding company and the operator of the majority of IKEA’s outlets. IKEA has its products in warehouses in most cases, but fewer ways to get them to stores because of transportation strains in many of its biggest markets.

“In general we are struggling to have the goods in the right place at the right time,” Mr. Öncü said in an interview.

The U.K., in particular, has suffered for weeks from a lack of truck drivers, including those for gasoline tankers, triggering shortages and long lines at gas stations. IKEA had previously estimated that 10% of items—about 1,000 products among 10,000—weren’t available in the U.K. Mr. Öncü said he couldn’t provide an exact figure for the level of goods unavailable globally, but that the U.K. was typical of the situation elsewhere.

Shipping containers in the Port of Los Angeles on Wednesday.



Photo:

Kyle Grillot/Bloomberg News

Still, shortages of items weren’t significantly impacting sales because the company has a big enough range to provide alternatives, Mr. Öncü said. Digital sales for the year grew sharply, as shoppers gravitated to online shopping during the past 18 months of on-again, off-again lockdown and Covid-19 restrictions, more than making up for any lost revenue.

On Thursday, IKEA said revenue rose by 6.3% to €37.4 billion, equivalent to around $43.4 billion, in the financial year ended Aug. 31. Digital sales accounted for about 30% of IKEA’s total sales last year, up from 18% the year before.

Counterintuitive though it may seem, part of furniture giant IKEA’s success stems from its policy requiring its customers to build its products. In this video, WSJ explains the behavioral psychology behind the “IKEA effect.” Photo: Isopix/Zuma Press

Write to Trefor Moss at Trefor.Moss@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link

About rudro

rudro

Check Also

Hiltzik: Biden’s budget reconciliation bill and climate change

The headline news about the global warming provisions of the big budget bill being negotiated …

Leave a Reply

Your email address will not be published. Required fields are marked *