# IKEA warns supply chain disruptions likely to last into 2022 Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-14 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: IKEA Leases More Ships and Buys Containers to Mitigate Supply Chain Disruptions Meta Description: Discover how IKEA is tackling global supply chain disruptions by leasing ships, buying containers, and re-routing goods to ensure popular products remain URL: https://financedigest.com/ikea-warns-supply-chain-disruptions-likely-to-last-into-2022html ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-10-14t112221z2lynxmpeh9d0mkrtroptp4ikea-results-1736837564271-compressed.jpg) By Anna Ringstrom STOCKHOLM (Reuters) -IKEA, the world’s biggest furniture brand, is leasing more ships, buying containers and re-routing goods between warehouses as it works hard to mitigate a “perfect storm” of global supply chain disruptions which could last into next year, executives said. The company, which earlier on Thursday reported record annual sales as locked-down consumers spent more than ever on their homes, is also reducing the number of versions of some products as it struggles with raw materials shortages to ensure its most popular items are available. “It is re-steering and re-routing. And on the retail side we have learned agility like never before because everyday you have to work with what you have. You have to find ways to solve customer needs with limitations that we have never seen before,” said Jesper Brodin, CEO of [Ingka Group which owns most IKEA stores](https://www.financedigest.com/ikea-stores-owner-ingka-says-campaigns-help-boost-store-visits-and-sales.html "IKEA stores owner Ingka says campaigns help boost store visits and sales"). Jon Abrahamsson, chief executive at brand owner Inter IKEA, told Reuters he expects the [supply chain](https://www.financedigest.com/minimising-supply-chain-cyber-risks-by-asking-the-right-questions.html "MINIMISING SUPPLY CHAIN CYBER RISKS BY ASKING THE RIGHT QUESTIONS") crisis to continue into 2022, with the biggest challenge currently to get goods out of China, where roughly a quarter of IKEA’s products are made. IKEA’s stores in North America are the [hardest hit](https://www.financedigest.com/digital-divide-hits-rural-black-americans-hardest.html "‘Digital divide’ hits rural Black Americans hardest") by product shortages, followed by Europe. To avoid disappointing shoppers, it is temporarily [removing unavailable products](https://www.financedigest.com/remove-the-digital-divide-for-employee-productivity-management.html "Remove The Digital Divide For Employee Productivity Management") from its websites and store showrooms, instead suggesting similar items. Brodin said no-one at IKEA had anticipated the current global [supply chain](https://www.financedigest.com/5-steps-to-successful-supply-chain-finance.html "5 Steps to successful supply chain finance") crisis, and that there would need to be a preparedness in future for unexpected swings in supply. It’s a [perfect storm](https://www.financedigest.com/for-britains-chicken-farmers-brexit-and-covid-brew-a-perfect-storm.html "For Britain’s chicken farmers, Brexit and COVID brew a perfect storm"). (But) I [think we are way past](https://www.financedigest.com/the-pull-of-the-past-1-in-5-keep-items-they-think-will-be-valuable-in-the-future.html "The pull of the past! 1 in 5 keep items they think will be valuable in the future") being surprised. This is the new normal for us. And when things stabilise we will have learned so much about agility and about sales steering,” he said. A large [share of IKEA’s range is sourced relatively close to sales](https://www.financedigest.com/monte-dei-paschi-to-have-underwriting-consortium-for-share-sale-by-tuesday-source.html "Monte dei Paschi to have underwriting consortium for share sale by Tuesday – source") markets. [Around 70% of products sold in Europe](https://www.financedigest.com/after-fleeing-war-ukrainians-struggle-to-settle-around-europe.html "After fleeing war, Ukrainians struggle to settle around Europe"), where IKEA has the bulk of turnover, are produced on the continent. Inter IKEA said sales of products and services at all IKEA [stores and online](https://www.financedigest.com/the-benefits-of-developing-online-stores-through-shopify.html "The Benefits of Developing Online Stores Through Shopify") totalled 41.9 billion euros ($48.7 billion) in the fiscal year to end-August, up 6% from the previous year and 1% from pre-pandemic fiscal 2019. E-commerce grew by 73% to account for [26% of total retail sales](https://www.financedigest.com/aldi-uk-says-december-sales-up-26.html "Aldi UK says December sales up 26%"). Ingka said separately its retail [sales rose 6% to 37.4 billion](https://www.financedigest.com/allianz-puts-n26-stake-up-for-sale-at-3-billion-valuation-ft.html "Allianz puts N26 stake up for sale at billion valuation – FT") euros. That was 2% higher than pre-pandemic levels, Brodin said. All over the [world interest in life at home has become](https://www.financedigest.com/snowboarding-british-teenager-brookes-becomes-the-youngest-world-champion.html "Snowboarding-British teenager Brookes becomes the youngest world champion") bigger,” Brodin said. “There is no sign of decline in demand in any of our areas as it is right now,” On the current fiscal year, Brodin said he believed demand would remain high. It is also be a matter of how we manage to be agile across the whole [value chain..](https://www.financedigest.com/ready-for-the-new-eu-payments-value-chain.html "Ready for the new EU payments value chain?"). I’m truly optimistic we have a good, [strong year ahead](https://www.financedigest.com/italys-mps-sees-safe-habour-ahead-after-strong-quarter.html "Italy’s MPS sees ‘safe habour’ ahead after strong quarter") of us. He added that a new IKEA store, currently under construction, would open in a central Stockholm [shopping mall this year](https://www.financedigest.com/scam-special-how-to-avoid-christmas-shopping-fraud-this-year.html "Scam Special: How to Avoid Christmas Shopping Fraud this Year"). ($1 = 0.8610 euros) (Reporting by Anna Ringstrom; editing by Jason Neely, Kirsten Donovan) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---