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Why do the same Ikea products cost more in Israel than abroad? By Adi Dovrat Tags: goods, Ikea, Israel, Sweden One of the reasons people go to Ikea is to get a good price. But it turns out that the prices at the furnishing store's Israeli outlets are about 30% above the prices in Britain and the Netherlands. The same items bought here cost about 24% more than in France and Sweden, TheMarker has found. The Marker looked at 21 products costing a total of NIS 17,000 at the Israel outlet. A consumer buying exactly the same products in France or Sweden would have paid the equivalent of NIS 13,000. In Britain and the Netherlands, the same items would have cost NIS 12,000. The comparison is based on the IKEA catalog for 2009, and exchange rates on August 20. Advertisement The differences exist for items large and small. Take for example the television cabinet that Ikea Israel offers for NIS 3,595. You can get the same thing in France for NIS 2,363. A desktop lamp sells locally for NIS 25, but in Sweden, Britain and the Netherlands it costs only NIS 13. The same fold-up desk that Ikea Israel offers for NIS 345 costs only NIS 180 outside the country. A face towel that Ikea Israel charges NIS 15 for costs only one shekel in Sweden and up to NIS 2.60 elsewhere. A three-seat sofa that costs NIS 3,395 in Israel can be had for NIS 2,626 in France and the Netherlands, and NIS 2,450 in Britain. Of the 21 items we checked, only two cost less in Israel than elsewhere. The other 19 cost more. In its 2009 catalog, Ikea Israel warned that prices would be about 5% higher than in previous years. In four years it had lowered its prices by about 10%, Ikea explained. Breaking down the math, Ikea Israel said a quarter of is products would cost more, 70% would stay the same and 4% would cost less. Shlomi Gabai, manager of Ikea Israel, said at the time the price hike was driven by the rising cost of raw materials and shipping. Even after the increases, he said, "Ikea offers the most attractive range of prices in the furniture and home design market in Israel." Ikea Israel is currently distributing its glossy 2009 catalog among 1.25 households in Israel, at a cost of NIS 8.5 million. That's half the local outlet's marketing budget for the year. This year the global chain is printing more than 200 million copies of its catalog worldwide, in 27 languages, for distribution in 36 countries. Around the world there are 283 Ikea outlets with 2007 sales of 19.8 billion euros. In Israel, the chain has been operating since April 2001 through a single, large store, 23,000 square meters in size. The outlet is located at the Poleg intersection in Netanya, just off the main highway. More than 16 million visitors have arrived since the store opened, and during a special summer sale in July and August, more than 200,000 customers passed through its doors, Ikea Israel says. Sales increased 5% compared with a special sale the year before. But what about those price differences? "There are two main reasons why prices in Israel are higher: Transportation costs and logistics costs in a distant country like Israel are tens of percentage points higher," Gabai says. "The time it takes to transport the item is two and a half months, on average, while to nearby countries it's a week." He also notes that exchange rates aren't favorable at present and prices were set about six months ago, when exchange rates were different. Bookmark to del.icio.us   Interfaith grandchildren A new group is helping U.S. seniors teach their interfaith grandkids Jewish traditions. Iranian war games Iran army to hold three-day drill amid speculation over Israeli strike.   1.   Distant country like israel!?!?!? 06:18  |  Mordechai Levy 08/09/08   2.   Ikea prices 06:51  |  Miron 08/09/08   3.   IKEA prices... 08:07  |  Jennie 08/09/08   4.   Two words to remember - "market pricing" 08:12  |  spyguy 08/09/08   5.   Still cheaper than Ace and Homecenter 08:15  |  AL 08/09/08   6.   The Stupidity of Israeli consumers 08:16  |  Yoav 08/09/08   7.   Profits in ISRAEL 08:49  |  HAL 08/09/08   8.   We do "NOT KNOW" the word "BOYCOTT" 09:50  |  Eli 08/09/08   9.   Ikea is just doing what everyone else is.... 09:59  |  Jeff 08/09/08   10.   IKEA is the world`s richest charity 10:00  |  rehovot 08/09/08   11.   THE KEY WORD IS 10:07  |  Robert 08/09/08   12.   boycott, boycott, boycott 10:41  |  Rina 08/09/08   13.   most profitable branch in the world & McDonalds 10:46  |  amos 08/09/08   14.   IKEA 10:46  |  Jerry Aviram 08/09/08   15.   Why? 11:03  |  Why not Bubby 08/09/08   16.   It`s simply market conditions and supply/demand 11:11  |  JS 08/09/08   17.   if they can get away with it and make more profit 11:58  |  zionist forever 08/09/08   18.   Distant country - from where? 12:01  |  Raoul 08/09/08   19.   Reply to #8 12:26  |  Leo 08/09/08   20.   ikea prices 12:35  |  rachel simson 08/09/08   21.   Ikea cost more here 13:04  |  Millicent 08/09/08   22.   Eilat 13:08  |  Ethan 08/09/08   23.   Reply to Leo #19 "Boycott" 13:38  |  Eli 08/09/08   24.   High prices as compared to Swtizerland 13:42  |  lionel 08/09/08   25.   One solution: send this article to everyone you know 13:50  |  Aikona 08/09/08   26.   Fools in Israel, Fools abroad 14:05  |  George 08/09/08   27.   IKEA prices 14:29  |  Charlie 08/09/08   28.   IKEA prices 15:02  |  Mel (M) 08/09/08   29.   value 15:19  |  pvdh 08/09/08   30.   IKEA joke.. 15:42  |  johnymac 08/09/08   31.   ikea prices in israel vs. other countries 16:23  |  hadass 08/09/08   32.   Ikea.... 17:59  |  Hans 08/09/08   33.   What is the exchange rate 18:19  |  Chris Linthwaite 08/09/08   34.   Tougher competion = lower prices 20:06  |  Martin 08/09/08   35.   IKEA ISRAEL 23:47  |  Des Boxall 08/09/08

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