Ikea anticipates stock shortages through 2022 as a result of global supply issues.
Due of the worldwide supply chain disruption, Ikea predicts a stock shortfall for at least another year.
“We genuinely expect the availability and raw materials difficulty to last for the better part, if not the entire [financial year to the end of August],” says the company. The financial Times quoted Jon Abrahamsson Ring, chief executive of Inter Ikea, owner of the Ikea brand, as saying, “This is here for a longer period than we imagined at the beginning of the crisis.”
The furniture wholesaler, as well as many other businesses that rely on shipments for the majority of their inventory, is experiencing difficulties due to a backlog at shipping ports.
“We’ll have to live with disruptions for the next year,” Jesper Brodin, the CEO of “Ingka,” the company that runs the bulk of Ikea stores, told the BBC.
“There is no easy fix for any of this, even if people are working hard all throughout the world, not just at Ikea,” he remarked.
Shipments are also disrupted since there aren’t enough drivers to distribute shipments that have arrived at ports. While extra materials are being shipped for the holidays, a dearth of employees to sort through the delivery and send them where they need to go is causing delays.
Despite the disruptions caused by the epidemic, Ikea claims that people remaining at home has resulted in an increase in sales. Sales grew by 6.3 percent, according to Broden. Ikea’s platform has been modified to be more e-commerce orientated as a result of the pandemic.
“We’ve seen a demand for home life like we’ve never seen before in every market,” Broden added, “because, of course, people have been in the same circumstance – confined to the four walls of their home.”
Ikea has been experimenting with new ways to acquire and store products in order to deal with stock shortages while simultaneously increasing sales.
“We’ve also moved goods by train from China to Europe,” an Ikea spokeswoman told the BBC last month. “We’ve also invested in temporary intermediate warehouses in China, Vietnam, India, Indonesia, and Thailand to help production.”