Ikea-flatpacking hits Ireland. But at what cost?

Posted: July 27, 2009 in Uncategorized

19825419

Ireland collectively stopped holding it’s breath this morning with the opening of the 1st Ikea store in the Irish Republic. I for one welcome it as, contrary to what people might expect, I love Ikea. Their shops offer you great value furniture and accesoires, great food and excellent childcare facilities while you shop. The retail concept works (obviously) and I expect to spend many, may euros in the Dublin Ikea store.

One thing surprised me though. Being a non-Irish company I expected Ikea to not sell their goods at prices significantly higher than their other European stores. Well I was dissapointed!

chair1chair2

The above pictures are from two identical products; one from the Irish Ikea store and one from the Dutch. There is a 140 euro price difference for the *same* product. And it’s not the only one. There is a 25% price difference across the line.

Now call me a fool but I have trouble believing that this is because Ikea is trying to take the collective Irish people for a ride. Instead I suspect that this might be caused beause of the ridiculously high costs of doing business in Ireland.

Either way it’s wrong that two the same products from the same retailer (Ikea) should have such a price-difference in countries that are both in the same economic zone (the EU).  I’ll see if I can get someone from Ikea to comment and will post their reply here.

Update: I must add that there is only a relative small difference with the prices in the Ikea Belfast store. However while I understand that the costs of doing business vary across Europe I have compared prices with 5 different countries and Ireland is by far the most expensive…

Advertisements
Comments
  1. Steph says:

    It’s a ridiculous markup but I’d imagine it is to do with the cost of doing business here. I can’t imagine what they paid for the site (or are continuing to pay for it). If you compare the price of the same item with Ikea UK there’s only a price difference of about €8.

  2. Sinéad says:

    You should do a comparison to the Sterling prices too.

    For example, a desk I purchased 3 months ago in Belfast is only £20 more expensive in the Dublin store.

  3. Sharon Hearty says:

    The Store Manager was interviewed on Newstalk this morning and stated that each Ikea store sets prices to the immediate market, for us that is Ireland and they guarantee to be cheaper than the competition within this market? You have demonstrated a very interesting point in your comparison and if we take what the store manager stated today on the setting of price for Ikea Ireland it just shows that Irish prices are way higher than the rest of the european zone. Thus the Ikea price whilst lower than it’s irish competition will still be making money – not surprising they persevered in setting up here. Hope they reply to you.

  4. Ronanob says:

    I’d say Ikea expect this type of price comparison to happen and for there to be an issue made of it.

    I agree with you that its not their fault. When it comes down to it the prices reflect our exorbitant VAT rate and other hidden taxes, our high cost of Labour, shipping of such bulky items to the store, crazy insurance costs in a litigious society etc.

  5. Connor Aston says:

    Have a look some items up to 40% more expensive. see the front page of our site.

  6. I know that for large companies such as Sony, Philips, etc. – the cost of distribution is the same no matter where it’s going in Europe – so for Finland, Italy and Ireland it costs them no more. The only reason said companies have charged significantly higher prices in the Republic is because we accept them. We complain a bit and moan, but until only recently, we have still consumed voraciously.

  7. IKEA Dublin says:

    Hi and thanks for all the interest and comments around the store opening.

    To answer your question about pricing, we can confidently say to customers that IKEA will offer the lowest price on the market for any of our products.

    IKEA set prices locally on a county by country basis as there are many factors that need to be taken into account. Factors that we have to consider are cost levels, currency variations, taxes (Eg VAT in Dublin is 21% and in the UK 15%) and competitor prices. IKEA’s commitment however is that we will always offer the lowest price in all our markets for all our products.

    Ongoing throughout the year our sales teams in each country review the prices for all products to ensure that each product has a substantial price difference to the competition. If we are challenged by our customer on a specific products’ price that we find to be comparable, we will lower the price with immediate affect.

    Thanks again – look forward to seeing you in the store!

  8. Alex says:

    VAT comparisons are a bit off here, as the price difference outlines is with the Dutch IKEA store, not the UK store.

    The Netherlands has a VAT (BTW) rate of 19% vs. Ireland’s 21.5% so not sure I can see 2.5% difference causing such major price discrepancies.

  9. Such a price difference is surely a mood dampner. I hope IKEA takes some steps to live up to the business concept it has so widely publicised.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s