IKEA Philippines faces stock issues as supply chain crisis persists

MANILA, Philippines — Customers of IKEA Philippines will need to exercise patience as the company announced on Thursday that stock shortages persist in their stores due to the ongoing global supply chain crisis.

In a statement, IKEA said the supply bottlenecks, which have plagued global commerce since the onset of the coronavirus pandemic in 2020, resulted in “availability challenges” as the company struggles to replenish its depleting inventory.

"We're all in the same boat. The global transport crisis has led to availability challenges in our stores," the global furniture retailer said in a statement posted on Facebook. "We assure you we are doing everything we possibly can to continue to improve the situation."

Pandemic-led lockdowns and mobility restrictions have left seaports congested, importers and exporters scrambling for container space, and raw materials in short supply.

At the same time, Jun Neri, lead economist at Bank of the Philippine Islands, said the high shipping costs are still concerning as they can force businesses to raise selling prices.

"Freight cost still elevated but starting to ease but ever so gradually so it's still here," Neri said in a Viber message.

The Swedish company became a global brand due in part to its easy-to-build furniture and cheap offerings but some in the country fear its entry in the Philippine market could lead to the end of local furniture makers. 

However, IKEA makes a living through its franchise system, as the firm is one of the world’s biggest franchisers and furniture retailers with over 415 stores in 49 countries.

IKEA entered the Philippine market back in December 2021 with the opening of its largest store in the world in the city of Pasay, attracting significant interest with help of SM Prime Holdings, which built its namesake store here. The company reiterated that stock availability is "improving day-by-day" in its recent statement.