IKEA Israel prices up to 150% higher than in Europe

Prices at IKEA Israel are 50 percent to 150% higher than those at company’s stores in Western countries, according to a 'Globes' investigation.

By ILANIT HAYUT/GLOBES
February 8, 2012 23:53
1 minute read.
IKEA's second Israel branch in Rishon Lezion has a

ikea restaurant 311. (photo credit: Ron Friedman)

 
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Prices at IKEA Israel are 50 percent to 150% higher than those at the company’s stores in Western countries, according to a Globes investigation.

IKEA Israel had a turnover of NIS 555 million in 2011.

Globes compared prices for the same items listed online at IKEA stores in different countries.

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The price comparison found differences in all IKEA departments.

For example, a Senior brand pot costs NIS 245 in Israel, or 74% more than the equivalent of NIS 141 it costs in the UK; white drapes at IKEA Israel cost NIS 345, 96% more than the equivalent of NIS 176 in the UK; a Duktig brand toy kitchen costs NIS 595 at IKEA Israel, 60% more than the equivalent of NIS 371 in the US; and an Expedit brand shelf unit costs NIS 245 at IKEA Israel, 152% more than the equivalent of NIS 97 in France.

Matthew Bronfman owns the IKEA Israel franchise, just one of the Bronfman family’s holdings in Israel, which include the controlling core of Israel Discount Bank, a stake in Shufersal Ltd., Palace Industries Ltd. and real-estate company Isralom Ltd. He first acquired a stake in the franchise in 2005, at a company value of NIS 216m., and bought out his partners four years later, at a company value of NIS 680m.

IKEA Israel opened its first store in Netanya in April 2001 and its second store in Rishon Lezion in March 2010. The Netanya store burned down in February 2011 and is due to reopen soon. A third store is planned for Kiryat Ata, near Haifa.

Higher taxes in Israel compared with other countries could explain a small difference in higher IKEA retail prices in Israel, but not 50%- 150% markups. High rent in Israel cannot explain the difference either. Furthermore, IKEA prices in the US, UK and France are similar, or fall within a narrow range.

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In addition, the IKEA Family customers club does not operate in Israel. IKEA Israel said the matter of a customers club was under review, and a decision would be made soon.

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