IKEA Owner Sees Cost Pressures Rising After Hit to Profits

The IKEA logo is seen on shopping carts inside an IKEA store in Navi Mumbai, India, on Dec. 17, 2020. Francis Mascarenhas/Reuters

STOCKHOLM—The owner of the IKEA furniture brand said on Wednesday it would raise prices due to supply chain challenges far into 2022, after it reported a drop in full-year profit due to higher transport and raw material costs.

Despite record demand as people spend more time at home due to the pandemic, pretax profit at Inter IKEA Group—franchisor to store owners and in charge of supply—fell 16 percent in the 12 months through August to 1.71 billion euros ($1.98 billion). Compared with the pre-pandemic fiscal 2019, profit was down 4 percent.