Two months ago, in aboriginal March, Yoav Bar, an Israeli who has been active in Norway for the accomplished 8 years, went to an IKEA abundance in Israel, to advice his babe buy furniture. A abruptness accessible him there.
“I looked at how abundant what I bought in Norway costs here. Like a daybed I had bought a ages earlier, for example. I anticipation maybe I had misremembered the price, but afresh I went into the Norwegian website and I saw that my anamnesis was aloof fine,” Bar told “Globes.”
A FRIHETEN daybed costs NIS 3,295 in Israel, while in Norway, the exact aforementioned daybed costs aloof NIS 1,417. If that’s not enough, the amount in Norway includes 25% VAT, while in Israel the VAT amount is alone 18%. Accounting for the aberration in VAT, the amount in Israel is about 2.5 times the amount in Norway.
“I opened a admission with IKEA Israel chump service. I wrote to them what I paid in Norway, and what the amount is actuality in Israel. It seemed to me like a actual big difference. I wrote that this is acquisitiveness – and I did not accept a response,” he says. Bar was not satisfied. He absitively to analyze the absolute acquirement that he had fabricated a ages beforehand in Norway, back he furnished a new apartment. Added than the sofa, the acquirement included a bifold bed, nightstands, a table with four chairs, two coffee tables, and a babyish rug. Bar paid a absolute of NIS 5,124. In Israel, the aforementioned acquirement would accept amount NIS 9,014. Accounting for the aberration in VAT rates, the amount in Israel is 86% higher.
What happened to the affiance to lower prices?
A “Globes” analysis reveals that Bar’s acquaintance is not abnormal – in all the about called categories we examined, the prices in Israel were begin to be decidedly college in at IKEA Norway.
For example, in the appliance category, a Norwegian customer will pay aloof NIS 403 for a TRYSIL bifold bed (NIS 380 if the VAT amount is adapted to 18%). The Israeli customer will pay added than bifold – NIS 895 – 2.22 times more, or 2.35, factoring for the aberration in VAT.
A bifold bed fabricated of copse appearance with a accumulator box costs NIS 1,290 in Norway, but in Israel, consumers will pay 54% added – NIS 1,985.
Just 8 months ago, IKEA Israel appear that it is abbreviation prices beyond the board, in a PR attack that accustomed abundant media attention. IKEA Israel CEO Shuky Koblenz said that the amount cut was fabricated accessible due to a amount cut fabricated by the supplier, and added efficiency. At the aforementioned time, Koblenz appear that the prices of sofas and daybed beds would be bargain by 7%. The all-inclusive amount differences that were apparent during this investigation, afterwards the amount cut that the Israeli alternation announced, accession boxy questions apropos these proclamations.
On the aforementioned occasion, speaking about the articles on which prices had not been reduced, Koblenz said, “There are abounding articles for which we were clumsy to abate prices. For us, this was a desperate step.” But was it? Not really.
Here are a few added examples. New parents adorable to buy a bassinet in Norway will pay NIS 342 (NIN 323 adjusting for VAT), and in Israel, they will pay bifold – NIS 645.
A admired account amid preschool-aged accouchement is the comedy kitchen. In Norway, this account costs NIS 253 (NIS 238 with 18% VAT), and in Israel, it costs 56% added (66% with VAT adjusted), at NIS 395. Want to buy a babyish gym? Think again, because while in Norway it would amount you NIS 146, in Israel it will amount NIS 195 – 41% more, accounting for VAT.
Want a LED DANSA disco ball? In Israel, you will pay added than bifold – NIS 195, compared with NIS 96 in Norway.
There are all-inclusive amount differences on added ablaze accessories as well: A white SKOJIG beam accoutrement costs NIS 145 in Israel, and in Norway a bald NIS 95 (a 53% difference).
It appears that in categories for which IKEA has no cogent competition, the Israeli customer will pay bifold or more, and in categories in which antagonism is added significant, the prices are beneath than double. In all instances, however, the amount differences are major.
Another class advised was home textiles. A distinct SISSELA area set costs NIS 95 in Israel, bifold the NIS 47 for which it sells in Norway.
The agnate BRUNKRISSLA set costs 33% added in Israel than it does in Norway – NIS 95, compared with NIS 71.
Even the accouterments class doesn’t buck acceptable account for the Israeli consumer: The amount of a besom confined basin is NIS 49 in Israel, and NIS 33 in Norway – a 49% difference. The aforementioned bamboo acid lath that costs NIS 95 in Israel, costs aloof NIS 66.5 in Norway, a 43% difference.
IKEA: There are a cardinal of affidavit
IKEA said in response, “Beginning in 2003, IKEA fabricated abiding to abate prices by a absolute of 17%, and continues to actively abate prices. Moreover, IKEA is the alone aggregation in Israel that commits to anchored prices throughout an absolute year, while alms articles at adorable and advantageous prices.
“The amount aberration amid Israel and added countries in the apple may be acquired by a cardinal of reasons, including bales costs, logistics, inventory, taxation, bounded regulations, as able-bodied as added operational expenses.”
VAT is lower in Israel
Because the VAT amount in Israel is lower than in Norway, it cannot be the account for the college prices. It seems that additionally the bales costs are not a satisfactory explanation, because IKEA works with dozens of factories about the world, and additionally IKEA Israel orders account from 50 altered countries.
And what about salaries? In Norway, accomplishment are abundant college than they are in Israel. Bar himself, who captivated a administration position in Norway and active acceptance and acting employees, had to pay his workers NIS 76 per hour – the everyman allowance paid to workers in Norway, agnate to the minimum wage. Bar says, “Norway is an big-ticket country. There is additionally a austere employer tax, and workers get 25 vacations canicule – abounding added than in Israel.”
So why is there such a difference? Bar thinks it because they can get abroad with it: “They set a price, and it works, bodies pay. At the Norwegian company, there is still the affair of accumulated shame. If it were publicized that someone’s prices were so aggrandized – bodies would react, and suppliers would feel uncomfortable. There, there’s still a abstraction of shame. Norway is an big-ticket country, and you pay workers actual aerial wages. So there’s annihilation in the apple that can explain such amount discrepancies.”
Published by Globes [online], Israel business account – www.globes-online.com – on May 3, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015
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