Ikea warns Trump's tariffs could push up prices

Impact of Tariffs on Ikea’s Pricing Strategy #

The leader of the company behind Ikea furniture stores conveyed concerns over the challenges tariffs pose in maintaining low prices, highlighting potential financial impacts on consumers. He stressed that tariffs complicate efforts to keep prices affordable, which is a primary objective of the company, and noted there had never been a beneficial period under high tariffs in the company’s history.

The introduction of increased tariffs by the U.S. on imports from countries like Mexico, Canada, and China has been met with warnings about economic harm. A significant portion of Ikea’s goods, approximately 70%, are produced in Europe, while the remaining 30% is sourced from Asia, mainly China. The potential 10% tariff on Chinese imports could affect Ikea’s pricing strategy.

Ikea’s leader emphasized the importance of longstanding relationships with suppliers, despite the external pressures of tariffs. Last year, the company reduced prices on about 2,000 products, absorbing a cost of over €2 billion, to ease the burden on customers amidst inflation.

In other developments, Ikea is set to launch a pop-up shop on London’s Oxford Street, named Hus of Frakta, inspired by its iconic blue carrier bags. The pop-up is a precursor to a permanent store opening on the renowned retail strip next year. This store aims to provide a complete Ikea experience across three floors, including its famous meatballs, targeting customers who find it inconvenient to visit larger outlets outside the city center.