Ikea Ireland hit by supply chain issues with 10% of products unavailable

Ikea has warned of supply chain issues that are affecting delivery of some products at its Irish stores, with up to 10 per cent of goods unavailable.

The furniture giant, whose flagship Irish store in Ballymun was the company's best performing outlet globally when it reopened for business after Covid restrictions were lifted, attributed the delivery issues in part to the coronavirus pandemic.

"Like many retailers, we are experiencing ongoing challenges with our supply chains due to Covid-19 and labour shortages, with transport, raw materials and sourcing all impacted. In addition, we are seeing higher customer demand as more people are spending more time at home," a spokeswoman for Ikea Ireland said.

Issues

“As a result, we are experiencing low availability in some of our ranges, with approximately 10 per cent unavailable. We hope this will reduce as the situation improves in the coming weeks and months. Going forward, we’re constantly looking for more opportunities to secure product availability for our customers and apologise for any inconvenience this may cause,” the spokeswoman added.

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In addition to the Ballymun outlet, Ikea also has a smaller "order and collection" store in Carrickmines, south Dublin.

Ikea also said problems have also impacted its business in Britain. In Britain, the retailer said it had been struggling to meet high demand for some of its products, especially mattresses.

Ikea last year switched distribution for its Dublin operation from the UK to Belgium to maintain supply flow following Brexit. The company said it experienced "initial disruption" to trade flows from "new border operation models and product requirement rules" but that these had not had a "significant impact" on the business.

Profits at the Irish operation of the Swedish home furnishings giant slumped last year due to the impact of the pandemic.

Profit

Recently filed accounts for Ikea Ireland show its pretax profit fell from €11.07 million in the 12 months to the end of August 2020 to just €3.7 million a year later. Revenues declined 13 per cent to €176.6 million from €203.5 million with a rise in online sales only partially offsetting the losses.

Overall, ecommerce revenues at the Irish unit increased to 24 per cent of total sales to about €42.3 million. This compares to 16 per cent or €32.6 million of turnover in the prior year.

Ikea, like other retailers, closed its stores in mid-March last year during the first lockdown period imposed by the Government. It reopened in June, once the restrictions were eased. It was forced to close between October and November and from January 1st of this year until May.

The retailer, which employs nearly 700 people locally, had been enjoying a 4 per cent rise in turnover ahead of the pandemic, largely due to a rise in online sales.