An investigation by "Globes" has found that prices at IKEA Israel are 50-150% more than for corresponding goods at IKEA stores in Western countries. IKEA Israel had a turnover of NIS 555 million in 2011.
"Globes" compared prices for same items listed online at IKEA stores in different countries. The price comparison found differences in all IKEA departments.
For example, a Senior brand pot costs NIS 245 in Israel - 74% more than the NIS 141 it costs in the UK. White drapes at IKEA Israel cost NIS 345, 96% more than the NIS 176 in the UK, a Duktig brand toy kitchen costs NIS 595 at IKEA Israel, 60% more than the NIS 371 in the US, and an Expedit brand shelf unit costs NIS 245 at IKEA Israel, 152% more than the 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 (TASE: DSCT), a stake in Shufersal Ltd. (TASE:SAE), Palace Industries (PI) Ltd. (TASE: PLND), and real estate company Isralom Ltd. He first acquired a stake in the franchise in 2005 at a company value of NIS 216 million, and bought out his partners four years later, at a company value of NIS 680 million.
IKEA Israel opened its Netanya in April 2001 and opened its second store in Rishon LeZion in March 2010. The Netanya store burned to the ground in February 2011, and is due to reopen soon. A third store is planned for Kiryat Ata, north of 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.
In addition, the IKEA Family customers club does not operate in Israel. IKEA Israel said that the matter of a customers club was under review, and that a decision would be made soon.
Published by Globes [online], Israel business news - www.globes-online.com - on February 8, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012