SINGAPORE: After IKEA Singapore announced on Thursday (Dec 21) that it will be absorbing the Goods & Services Tax (GST) increase from 8 to 9 per cent due to kick in on Jan 1, 2024, many netizens applauded and thanked the furnishing retail company.
The company said in a press statement that it’s ensuring that prices online and in its stores are affordable amid high costs of living. IKEA Singapore has gone the extra mile to keep its supply chain efficient so that IKEA can pass on savings to consumers via guaranteed low prices. This means that prices will not go up despite the GST hike required by the Inland Revenue Authority of Singapore.
The announcement was greeted with enthusiasm on Reddit, with local users on the platform commending IKEA and noting that the food prices in the store are very low. Others pointed out that IKEA members can even get coffee or tea for free and enjoy discounts on meals.
“Foreign company looking out for the little guy. Thanks, IKEA!” wrote a commenter, who added that the store’s price for coffee for non-members, 50 cents, is even lower than what’s charged at hawker centres.
“Their ice cream is also 50 cents and hotdog $1. I wonder how they even make money,” added another.
Others pointed out that the low food prices are a marketing strategy to draw people in. This serves two purposes—to show that the stores are always full and to attract consumers to buy big ticket items, explained commenters, who also commended the brand for “pull(ing) it off quite well” and being “pretty damn effective.”
Reddit users’ praise for IKEA also came with criticism toward the PAP government, as many have been unhappy that the GST hike has come at the same time that living costs have increased. “IKEA for Government!” one even wrote.
Others appealed for NTUC, Singapore’s largest retailer, to follow IKEA’s example in absorbing the GST hike. The retailer announced it would do so, but only for 500 essential items for six months.
“Companies, take note. This is how you keep your customers loyal and happy to buy your products and services. Not by pulling stunts like pasting fake discount price tags over original price tags with the same figure,” another wrote pointedly.
IKEA Singapore did the same thing when the GST went up from 7 to 8 per cent on Jan 1 this year.
In October, the company also lowered the prices of over 140 products to keep products affordable and announced plans to further reduce the costs of over 60 more items by April next year.
Read also: IKEA Singapore to absorb GST hike to keep items affordable /TISG