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Ikea warns that stock shortages will continue into next year

by Lester Blair
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Ikea, the Swedish furniture manufacturer, said that the disruptions to the global supply chains will continue at least for another year.

Jesper Brodin, chief executive said that although there has been improvement in the situation, congestion at ports still causes problems.

He stated, “We have to be able to deal with the disturbances of the next year.”

Poundland owner also predicts that the supply chain pressure will persist into 2022.

Andy Bond, the chief executive at PepCo which is also owner of Poundland said that shipping costs have soared. His words were: “There have been some instances when we have to pay 10x our normal rates.”

While it is not possible to do this every single day, the result has been significant.

Bond stated that the retailer has good stock levels for Christmas, and does not anticipate increasing prices due to rising shipping costs. He said that he believes the next twelve months will be difficult.

Ingka chief executive Mr Brodin told BBC the UK was suffering from congestion in ports and disruptions to supply chains.

He stated that there is no quick fix for any of these problems, even though people work hard at Ikea and around the globe.

Ikea announced last month it could not supply 10% of its inventory, which is around 1000 product lines, to 22 UK and Irish stores due to a continuing shortage in HGV drivers.

It was discovered that Felixstowe, a key British port, had suffered from logjams in shipping containers due to the Christmas rush and the shortage of drivers who could shift them.

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Ikea had to order additional shipping containers or charter vessels in an effort to solve product shortages.

Ikea spokeswoman said last month that Ikea has also shipped goods via train from China to Europe. Ikea also invested in interim warehouses in China Vietnam, India and Indonesia to help support the production process.

Brodin explained that “One thing we’ve learned is that it can be hard to predict. It is important to stay focused on the problem every day in order to find the most effective solutions.

“We must accept that there will be some disruptions in the coming year, but I am confident things will improve.”

Ikea revealed that, over the year to 31 August, sales rose by 6.3% to €37.4bn (£31.6bn).

Brodin stated that the Covid pandemic struck last year and the group had to accelerate its plan for investing in strategies to satisfy customer needs, take on the “new competition”, especially in the online sector.

His statement was that the transformation plan of two years had already been implemented and was completed within two months.

Brodin indicated that the “pandemic” was a very difficult situation.

He stated that the annual growth in sales was what he was most proud of during the 25 years he spent with the company.

“We’ve seen the increase in demand for home life like no other in any market. People have always been trapped within their four walls.

Source: BBC.com

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