Buying From IKEA? Do It in Norway

An investigation by business journal Globes found that IKEA prices in Israel are almost double those of identical products in Norway.

Yuval Tebol

The prices of IKEA products in Israel are nearly double the prices of the identical products in Norway, Globes website revealed on Sunday.

Globes related the experience of Yoav Bar, an Israeli who has been living in Norway for the past eight years, when he went to an IKEA store in Israel, to help his daughter buy furniture.

By comparing the prices in Israel with those on the IKEA Norway website (at current exchange rates,) Bar found that prices in Israel are 86% higher than those in Norway (accounting for differences in VAT.)

A FRIHETEN sofa, for example, costs 3,295 shekels in Israel, while in Norway, the exact same sofa costs just 1,417 shekels. The price includes VAT, which is 25% in Norway but only 18% in Israel. Accounting for the difference in VAT, the price in Israel is nearly 2.5 times the price in Norway.

A separate Globes investigation gave similar results. It found that new parents looking to buy a crib in Norway will pay 342 shekels (323 adjusting for VAT,) while in Israel they will pay double – 645 shekels.

Likewise, a play kitchen for pre-school age children costs 253 shekels (238 shekels with 18% VAT) in Norway, while in Israel it costs 395 shekels – 56% more (66% with VAT adjusted.)

Significantly, IKEA Israel announced eight months ago that it was reducing prices across the board – an announcement that received much media attention.

"It appears that in categories for which IKEA has no significant competition, the Israeli consumer will pay double or more, and in categories in which competition is more significant, the prices are less than double," Globes notes.

"In all instances, however, the price differences are major."

In response, KEA said: “Beginning in 2003, IKEA made sure to reduce prices by a total of 17%, and continues to actively reduce prices. Moreover, IKEA is the only company in Israel that commits to fixed prices throughout an entire year, while offering products at attractive and worthwhile prices.

“The price difference between Israel and other countries in the world may be caused by a number of reasons, including freight costs, logistics, inventory, taxation, local regulations, as well as other operational expenses.”

Globes doesn't buy it. Bar, it writes, thinks IKEA prices are higher in Israel because they can get away with it.

“They set a price and it works, people pay. At the Norwegian company, there is still the issue of corporate shame. If it were publicized that someone’s prices were so inflated - people would react, and suppliers would feel uncomfortable. There, there’s still a concept of shame."