It may seem hard to believe, but there are still many multinational businesses and brands that are yet to set up shop here in the Philippines. Until lately, one of these big-name brands is IKEA, the Swedish-Dutch conglomerate that specializes in ready-to-assemble furniture, among other household essentials. Their entry into the Philippine market has been one anticipated by those who would know the IKEA name. It also helps that they partnered with SM Prime Holdings in opening their very first store in the country. There was a problem however. They started operations this December last year, during the COVID pandemic.
And as the Philippine Star now has it, the side-effects of the global pandemic have resulted in supply issues that have the IKEA Philippine flagship store in Pasay City suffering stock shortages. IKEA Philippines released a statement this past Thursday, January 27, urging their customers to exercise patience should any items they are looking for are not available. Their supply bottleneck is but a drop in a massive ocean of international supply issues affecting delivery of new stocks, with other big brands like LEGO feeling the pinch. Addressing “availability” challenges even as their stock inventory depletes has been a challenge for IKEA Philippines this year.
The retailer’s statement, posted on Facebook, notes how many businesses are adversely affected like them. “The global transport crisis has led to availability challenges in our stores,” announced IKEA Philippines. “We assure you we are doing everything we possibly can to continue to improve the situation.” Furthermore, the Philippine store is but one of more than 400 IKEA stores located across 49 countries around the world. The supply problem therefore goes beyond the Philippines too.
With COVID stretching its welcome globally due to having a succession of variants like the current Omicron strain, resultant lockdowns and travel restrictions, particularly in places where IKEA gets its raw materials or stores its stock for distribution must contend with shipping container space and seaports clogged with cargo vessels, not to mention rising costs of freight. Bank of the Philippine Islands (BPI) lead economist Jun Neri remarks that a continuing increasing in shipping expenses could lead to businesses relying on such freight to raise prices on goods to compensate. Fortunately, said freight costs apparently are slowly decreasing. IKEA Philippines also adds assurances that their stock availability should get better as the days go by.
Image courtesy of IKEA