IKEA Dublin Opening - A Review

Anyone who is familiar with the home products industry knows that IKEA's business concept is based on offering an extensive variety of stylish but durable home furnishing products at rates that are cheaper than the market price. The management at IKEA believes that this concept contributes majorly in helping more and more people live a better life at home. At IKEA, the final price is decided before even the designing begins and products are manufactured, transported and sold keeping in mind this price limit.

IKEA already has its presence in more than 36 countries through its 300 stores. To mark the opening of the new Dublin store, huge amount was spent on telling people about what it is and the business concept it promotes. A massive ad campaign was also launched that was aimed at informing people about the rebellious ideas of IKEA. One of the video commercials can be seen below, which has been posted on YouTube by IKEA Dublin.

We have come across many people who love IKEA simply because it makes their shopping experience a pleasant one. According to The Irish Times, Dublin store is receiving more than 15,000 visitors every day. An IKEA store offers superb furniture in addition to a great ambience, wonderful food and excellent kids care facility aimed to help people while they busy in buying stuff. This retail concept is obviously working. Moreover, the economic slump has made buying low-priced furniture more relevant than ever. According to Mikael Ohlsson, the new chief executive of IKEA, the Dublin store was ready for opening months before but the government took time to take care of the roads leading to it. The Irish Independent predicted a heavy rush on first few days of opening. Thousands queued in front of the store before it formally opened its gates on 27th July, many lead by their desire to be a part of such a gala event.

However the thing that has surprised lot of people is the price at which goods are being sold in Ireland. The merchandise has a price tag of 8-30% more than rest of its European counterpart (Reference 1 & 2). Looking at two identical products on the store's websites for different countries, you will find that Irish IKEA is selling them at a higher rate as compared to Netherlands or UK. Though there is only a relative small difference with the prices in the IKEA Belfast store, it has not made some people happy. Many are already talking about it on their blogs stating that they understand that costs of doing business vary explicitly across Europe, but on comparing prices with 5 different European countries one will find Ireland to be most expensive of all. Irish internet users also argue that this price difference is due to the fact that every now and then, we accept higher prices and sometimes not even complain about it. They also gave examples of companies like Phillips, Sony etc. that always keep the cost of distribution constant, no matter where their go in Europe.

In reply to this accusation, an IKEA representative clarified that their prices are set locally, based on the intrinsic policies of the country (Reference 3). The representative also stressed that IKEA is committed to offer lowest price on the market for any of their products. Factors that become milestone for consideration include currency variations, cost of transportation, taxes (E.g. currently Ireland has a VAT rate of 21% and in the UK it is 15%) and competitor prices. Also, the sales teams in each country review the pricing policies throughout the business year and make recommendations if there needs to be any price change. The team also ensures that each product is priced at a considerable difference than the competition. If any store is challenged by the consumer on a particular product’s price that can be compared; the store immediately lowers the price of that specific commodity.

In spite of this, individuals celebrated shopping at IKEA in their small ways. For some, getting a low cost lunch or snacks was a moment to enjoy. The apparent festivity in the mood could be seen when few of them took photographs of what they ate and posted on their blogs. Regular menu has prawn and egg salad open rye sandwich for €2.75, not to mention the €1.00 tea (or coffee) with free refills. Of course, free refills are common in many countries but not in Ireland.

So, if you haven't been to the IKEA store till now, you must visit it as and when you have time, even if you don't wish to buy anything. Rest assured, once you hit the store you'll not be able to resist the temptation of getting something for your sweet and cosy home or bite that yummy food available throughout the day.

References from the following websites/pages were used in this article.

1. http://www.irishpressreleases.ie/...huge-ikea-price-differences/
2. http://www.irishtimes.com/newspaper/ireland/2009/0722/1224251064355.html
3. http://evertb.wordpress.com/2009/07/27/ikea-flatpacking-hits-ireland-but-at-what-cost/

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