You might recall a previous post — and, apparently, a Google fave — in which I compared U.S. and Canadian prices for an identical IKEA product: the Hemnes chest of drawers. I calculated that Canadian consumers were paying 53.85% more at IKEA Canada than they would at IKEA USA.
Some other Canadian retailers have responded to consumer outcry by lowering prices. Wal-Mart Canada is rumoured to charge the U.S. sticker price on magazines and books. And IKEA made a splashy press announcement yesterday, too:
BURLINGTON, ON, Nov. 1 – IKEA Canada announced today that it will begin honouring the recent federal government’s GST tax cut on all 9,500 home furnishings products – effective immediately. In addition to the GST cut, IKEA Canada has taken the decision to also lower the prices on over 1,000 products.
So it might be time to revisit my calculations. The Canadian price for the chest of drawers below:
Ikea Canada’s Hemnes Chest of Drawers: Still $349.00
Now let’s re-check the same chest of drawers if you happen to live in The Land of Bush:
IKEA USA’s Hemnes Chest of Drawers: Still $249.00
IKEA Canada has reduced the Goods & Services Tax, which Canadian consumers would pay on the item, from 6% to 5%. So the Canadian price, independent of provincial sales taxes, would be $366.45 (down from the previous calculation of $369.94, a whopping reduction of $3.49 for this piece of furniture).
The Canadian dollar, as of this writing, sits at $1.0567 USD, making the price of the US Hemnes chest $235.64 CAN. So… two weeks ago, the Hemnes price was 53.85% higher in Canada than in the U.S.. What is it today?
56.99%
Nice work, IKEA.
But let’s be fair. I called IKEA Canada’s Etobicoke store and spoke with a friendly and helpful sales representative who was quick to point out what I already knew, that his employer had cut the price of 1,000 products in response to the strong Canadian dollar. And, indeed, a quick visit to IKEA Canada’s website bears this out (note, too, the GST reduction button):
“Over 1000 products have been reduced,
but we’re only going to tell you about one of them.”
And, like the caption (above) states, only one actual item of the “over 1000″ reduced is listed on the website. A set of pots. Bravo, IKEA Canada! You need to go to the store to see all of the new, lower prices. I think you should call them instead.
I did, and for those Canadians still interested in the Hemnes chest, I confirmed: it’s still priced at $349.
But let’s give bank economist Doug Porter the last word:
Bank economist Doug Porter said Canadian retailers don’t really have a choice when it comes to cutting prices to meet consumers’ expectations. Retailers who say they can’t cut prices because they paid for merchandise months ago when the value of the Canadian dollar was lower will have to eat the loss, he added.
“That’s the retailers’ problem, not the consumers’ problem. The value of a good isn’t what you paid for it yesterday, but what someone will pay for it tomorrow,” he said.
“If Canadians can see the same item across the Peace Bridge for 30 per cent less, it makes no difference to them that the retailer bought it at a six-month-old exchange rate.”
16 comments
i came across your site while looking at the mandal bedframe which is $299US and $449 CDN! Absolutely outrageous con, look at the Mandal page to try and understand what the hell is going on, some things at par, some at 10% difference some at @. Smells pretty fishy to me, like pickled herring
That is… unusual. The bedframe alone is $199 USD, but add boxes to the frame and it’s (as you state) $299, a $100 USD increase. Fair enough (I guess). But in Canada the bedframe alone is $249 CAD and bedframe boxes is $449 CAD, an increase of $200 CAD!
I don’t pretend to understand the intricacies of product pricing, but that’s just fucked up. I hope you’ve chosen not to buy at this time.
I almost bought a Vreta leather sofa today in the Ottawa store (CDN $999) but at the last moment decided to check out the US prices first… the same sofa retails for $749 US south of the border. I tried asking when the price will go down, but got a standard reply (“lower prices on over 1,000 items… blah-blah-blah”).
I decided not to shop at IKEA for the next few months in the hope that the prices will go down (and it’s tough not to go to IKEA on weekends – I just bought a condo and need quite a few items for it…)
I was about to purchase just short of $6000.00 for whole house cabinets. My daughter suggested I try the US site. Of course I found the same as you. What I don’t understand is the suggestion by some that they won’t shop at Ikea for a few months. I bloody well will never spend a cent there again. They are just plain old ripping us off, and we are sheep enough to stand for it.
Ed
I did a google search to see if there were any official press releases from Ikea with some explanation, and came across this blog instead. I was about to go to the Etobicoke store to get an ottoman and slipcover, and then decided to check the US site (like I do every time I’m about to purchase something from Pottery Barn, who is equally bad when it comes to US/CAD conversion). My $199 ottoman retails for $129 in the US! And since unfortunately there is no Ikea store anywhere near the Ontario border, I just will have to get an ottoman elsewhere because I refuse to get ripped off!
[...] six weeks ago, we looked at IKEA Canada’s price-gouging on a few items, and their bullshit attempts at spin control when Canadian consumers started paying closer attention to the huge discrepancy in pricing north [...]
Back in September, I began checking the price differentials on office chairs. The differences were astounding. The best office chairs that they sell here were more than 50% more expensive and I called Ikea to see if they would match prices. They said no. I also have some leftover Ikea credits (cards with cash value from returns, etc.), but Ikea will not accept them in the United States. Since then, I have not purchased one item there and I refuse to buy from this company again unless they are more competitive. Unfortunately, I see that many people people either do not care or are unaware of the price differences. Please continue to get the word out there.
And of course the matter is worse for those of us who don’t live close enough to the border for cross-border shopping to be practical. Then again, IKEA’s prices are identical across the country; that’s not the case with many stores. If an item is $1,000 in Toronto, it’s $1,000 in Edmonton too, not $1,299.
as the (until recently) customer service manager in ikea ottawa, I can tell you that they have a field of dreams attitude – if they build it, you will come. I used to wonder how a company could be so arrogant – but the line ups at the doors proove that quality and service are not as important as price. the above posts are proof that customers ARE waking up. Incidently, no sour grapes here – after 20 years at IKEA, every day was like being a saturday shopper
Its time to up the ante. Vast majority of Ikea shoppers are not AWARE of the huge price disparities, despite the easy access to this information. Time to make them AWARE.
Some ideas: drop home-made flyers in the catalogues at Ikea stores that highlight the price discrepancies between US and Canada Ikea stores. Put home-made stickers on the catalogs, store shelves. Spray paint on the billboards. Anything to make people aware. This is war!!!
Hopefully, a few media stories get written up and then the word goes out even further.
As long as people keep shopping there, Ikea can get away with fleecing them.
The price differentials are irrelevant unless you live in southern Ontario or Montreal. Sure I could buy a Hemnes chest of drawers for $100 less at IKEA USA, but it would cost me $2,000 to get to the nearest US IKEA (1,300 miles away) and have the item shipped back. I’d also probably have to pay $100 in duties to get it through Customs, the likely cause of the higher prices.
And this is why IKEA can gouge Canadian consumers, Charlene. In practical terms, as a consumer who absolutely needs to get an IKEA-branded product, you’re right. But no one absolutely needs to get an IKEA-branded product. Especially when the retailer shows utter contempt for the wallet and intelligence of their customers, who can easily see that identical products from the very same supplier have such an egregious cross-border price differential.
I’d like to take this opportunity to thank you not just for your comment — dissenters welcome! — but also for being the first commenter with a gravatar.
we almost bought that VRETA sofa bed after the HOPEN bed, for the same sofa bed we have to pay 299 more than in States, we asked our friend who is a manager in IKEA, he said “……. for that question I`ve been asked too many times at work,well as a friend I really cann`t find any reasonable answer for you, maybe Ikea think we`re stupid” what can I say, according to him they are selling around 20 Vreta each month, that`s almost 6000 difference they could make.
I used to work at IKEA and I know why this happens. Don’t get me wrong, it’s still their fault, but not as much as you guys think. Here is the deal. Every IKEA store HAS TO commit to buying x number of everything a year ahead (during budget time). So IKEA budgets to sell X number of Mandal beds per year, and they have to pre-pay ahead of time (once a year) for everything they are going to buy to the main IKEA corp. This happens every March. So if IKEA prepays at $300/bed in March 2007, and the dollars drops dramatically in October 2007, they really can’t do much about it. I think in the long run they should just fix their ordering process and not commit for such a long time…
Do not buy IKEA garbage. I bought a light fixture 2 years ago. The transformer burned out. I went to the store yesterday and was told that they do not sell transformers anymore. Had bed experience with some other stuff that they carry. Cheap “made in China” garbage that they sell at prices equal or higher if it was made in Canada. What a ripoff for consumer.
I have been a IKEA shopper all my life. Today I looked up an Alex 9 Drawer unit Canadian price 149$ – planning on buying it for Christmas. I accidentally looked up the USA price .. and to my shock I found that it is TWENTY THREE percent cheaper in the USA at 119$. For the same product that is manufactured overseas and shipped to both contries? OUTRAGEOUS RIPOFF INDCEED! I will never buy at IKEA again.