Ikea Expects Stock Shortages Into 2022 Due To Global Supply Issues
Ikea expects a shortage of its stock for at least another year due to the global supply chain disturbance.
“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]. This is here for a longer period than we thought of at the beginning of the crisis,” Jon Abrahamsson Ring, chief executive of Inter Ikea, owner of the Ikea brand, told the Financial Times.
A backup at ports is causing delays for the furniture distributor, as well as many other companies that rely on shipments for a majority of their stock.
"We need to live with disturbances for the year to come," Jesper Brodin, the chief executive of “Ingka” which operates the majority of Ikea’s stores, told the BBC.
"There is no easy fix to any of this even if people are working hard across not only Ikea but also across the world," he said.
The disturbance in shipments is also caused by not having enough drivers to distribute shipments that have arrived at ports. While extra materials are being shipped for the holiday season, the shortage of workers to sift through the deliveries and get them where they need to go is causing backups and delays.
Ikea says although disturbances have occurred from the pandemic, it has caused an increase in sales due to people being home. Brodin said that sales increased by 6.3%. The pandemic has caused Ikea to transform its platform to be more e-commerce focused.
"We have experienced the demand on life at home like never before in every market, since, of course, people have been in the same situation - confined to the four walls of their home," Brodin said.
To deal with shortages, but also an increase in sales, Ikea has been finding alternate ways to receive and store products.
“We have also sent goods by train from China to Europe and we have invested in temporary intermediate warehouses in China, Vietnam, India, Indonesia, and Thailand to support production," a spokeswoman for Ikea told the BBC last month.
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