SINGAPORE: IKEA Singapore will absorb the one per cent hike in the Goods and Services Tax (GST) scheduled to take effect on Jan 1, 2024.
“Our decision to absorb the new GST rate increase fulfills our promise to customers of being the most affordable, accessible, and sustainable home furnishing retailer in the country,” said Mr Gerard Jansen, the Country Retail Director for IKEA Singapore and Philippines.
“IKEA Singapore remains committed in our mission to create a better everyday life for the many people and we are glad to be able to keep prices down to support our customers especially in challenging times, when they need it the most,” he added.
The company said that it has gone the extra mile to ensure that its supply chain stays efficient so that IKEA can pass on savings via guaranteed low prices for consumers. This means that prices will not go up despite the GST hike required by the Inland Revenue Authority of Singapore.
The increase, which will bring the GST from eight to nine per cent, will not be implemented in the furnishing retailer’s stores in Singapore so that its offerings remain affordable for consumers amidst rising costs of living.
IKEA announced this in a press release on Thursday (Dec 21) and will be applicable to in-store and online purchases.
There are at least two other schemes that the company has implemented to ensure that Singaporeans get top value, which are IKEA’s ‘We lower prices where we can’ and ‘New home package’ initiatives.
This is not the first time IKEA has endeavoured to keep its items affordable. Earlier this year, it also absorbed the first tranche of the GST hike from seven to eight per cent, which took effect across the country on Jan 1, 2023.
More recently, IKEA Singapore 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 of next year.
The brand’s announcement in October keeps with IKEA’s price reductions worldwide. Mr Jon Abrahamsson Ring, the CEO of Inter Ikea Group, the worldwide franchiser of the brand, said, “I think 2023 was the year when we turned the corner on prices and started lowering them again.”
This strategy has reduced prices by up to 20 per cent on select items in Singapore. For instance, the price of a Malm chest of six drawers decreased from S$249 to S$199, and the Kallax shelving unit is now priced at S$89, down from S$109.
These reductions aim to address the financial concerns expressed by Singaporeans in Ikea’s 2022 Life At Home report.
Based on a survey of 1,000 Singaporeans, the report found that 74 per cent of respondents expressed concerns about their household finances.
Read also: Ikea Singapore lowers prices of over 140 products /TISG