In the market for a new place? The bad news is that rent will be terrifying. The good news is, furnishing it just got cheaper!
What happened: Ikea is slashing prices on a range of its furniture worldwide, as easing supply chain costs have made things cheaper to produce. In a world where food and gas prices remain sky-high, at least the famous Billy bookcase just saw a 20% discount.
Why it’s happening: Ikea isn’t doing this out of the goodness of its meatball-sized heart. It’s part of the company’s broader strategy to lower prices over time as it figures out how to make products more efficiently — a strategy that was briefly abandoned due to high inflation.
To account for higher costs of raw materials and transport, Ikea started raising prices in the past few years, jacking them up by as much as 80% on some of its items.
- While annual sales increased by 6.6% due to these price hikes, the volume of items sold fell. Ikea is now betting that lower prices will get shoppers back in store.
Yes, but: Poängs and Nissafors might be cheaper, but prices for things that aren’t Swedish furniture are staying put… or going up. Several major companies recently announced price hikes, like PepsiCo for its snacks, Disney for its park tickets, and Netflix for its subscriptions.
Why it matters: A Bank of Canada official recently said constant price hikes by both foreign and domestic firms have helped keep inflation sticky. Ikea may be bucking this trend, but other retailers aren’t, especially as shoppers have gotten used to paying more.—QH