As global supply chain problems persist, Swedish furniture maker IKEA plans to hike its prices.
CNN Business reported:
Ikea said prices at its stores will increase by an average of 9% around the world to help offset significant transportation and raw material costs incurred by Ingka Group, which owns and operates most of Ikea stores worldwide.
With its do-it-yourself philosophy embodied in its virtually staff-free showrooms to its flat-packed furniture, Ikea has become synonymous with low prices and value. Despite surging costs during the pandemic, Ikea stores had largely kept prices stable. But, as commodity and shipping prices continued to surge, the company said it was no longer able to absorb that damage to its bottom line.
“Unfortunately, now, for the first time since higher costs have begun to affect the global economy, we have to pass parts of those increased costs onto our customers,” IKEA retail operations manager said in a statement, according to CNN Business. “Our intention is to give back to the customer any decrease in purchase prices we get.”
Several industries in the United States are likewise pressed with cost pressures arising from the supply chain crisis. For instance, automakers are coping with a computer chip shortage. As a result, the Bureau of Labor Statistics’ most recent inflation report indicated that used and new vehicles — up 31.4% and 11.1% in price, respectively — are contributing heavily to inflationary pressures.
However, Sen. Elizabeth Warren (D-MA) is arguing that “corporate greed” is responsible for the surge in car prices.
“This market concentration has reduced competition, allowing giant corporations to deliver massive returns for shareholders,” Warren wrote in a letter to Commerce Secretary Gina Raimondo. “But it has harmed consumers by enabling these dominant companies to increase prices and underinvest in key capabilities, which has the effect of also reducing product innovation and product quality.”
“These semiconductor manufacturers are putting stock price, profits, and growth ahead of the needs of American consumers and workers,” the lawmaker continued. “As the COVID-19 pandemic demonstrated, this behavior can lead to terrible consequences and shortages for our country.”
Warren has levied the same accusation against other industries. For instance, she blamed Tyson and other poultry companies of “price fixing,” “excessive consolidation,” and “plain-old corporate greed” as meat prices reached record highs before Thanksgiving.
“As poultry companies report record profits, hand out executive pay raises, and spend billions on stock buybacks and dividends,” she said in a letter to Assistant Attorney General Jonathan Kanter, “I am requesting that the Antitrust Division of the Department of Justice (DOJ) examine how poultry companies’ anticompetitive practices raise costs for American families and lower wages for American farmers — all while enriching poultry executives and shareholders.”
“Lack of competition in the poultry industry is allowing these massive companies to squeeze both American consumers and farmers to fuel record corporate profits and payouts to shareholders,” she continued. “When companies have monopoly power as massive suppliers, they can jack up prices of the goods they sell.”