IKEA plans to increase the number of its products made in the United States as higher tariffs continue to push up the cost of importing furniture from overseas, according to a Reuters report.
The shift marks a notable change for the Swedish furniture giant. Only about 15% of the products IKEA currently sells in U.S. stores are made domestically, compared with much higher local production levels in other regions, including Europe and Asia. IKEA previously operated a factory in Danville, Virginia, but closed the facility in 2019 and moved production back to Europe.
The renewed focus on U.S. manufacturing comes as tariffs raise the cost of shipping bulky items such as bookcases, mattresses, and sofas across borders. While avoiding tariffs is one benefit, IKEA has said the bigger goal is to place production closer to customers so it can react more quickly to changes in demand and reduce the risk of overseas supply disruptions.
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By making more products in the U.S., IKEA also expects to cut long-haul shipping costs and shorten delivery times, two issues that have become more challenging since the pandemic. The company believes the move will help reduce out-of-stocks and improve overall service for customers.
The manufacturing push also comes as IKEA continues to invest in its U.S. logistics and delivery network. Earlier this year, IKEA acquired last-mile delivery technology provider Locus, a move aimed at giving the retailer more direct control over route planning, delivery visibility, and last-mile delivery.
In a recent interview with SupplyChain247, Locus CEO Nishith Rastogi said the deal allows the company to scale its technology across a much larger global operation while continuing to serve enterprise customers. For IKEA, the combination of more U.S.-based production and in-house delivery technology points to a supply chain that is becoming more tightly connected from factory floor to front door.
