Spiegel Online International reports this week of a shocking tell-all penned by IKEA managing director Johan Stenebo. I investigate IKEA in detail in my new book, CHEAP:The High Cost of Discount Culture, and I'm delighted to see a former IKEA executive coming clean on the company's questionable business practices.
Stenebo, a 20 year veteran of the company, headed up IKEA's GreenTech division and had quit thanks to what he describes as a crisis of conscience. "The company was easier to run when (founding director Igmar) Kamprad played the role of an ascetic, slightly dim geriatric," Stenebo says. "Apart from that, the petit bourgeois façade helped to push down prices with suppliers." IKEA, the largest furniture company in the world, is also one of the largest users of wood in the world, and it keeps prices low by sourcing timber from the Russian Far East and China, where forestry practices are--to put it kindly--questionable. Cheap furniture--like cheap clothes, cheap food, cheap electronics--come loaded with a long list of externalized costs--most of them unknown to consumers.
Despite its Scandinavian elan and cool image, IKEA is no different from any other highly profitable discount retail chain--it keeps its prices low by paying its suppliers as little as possible, and scouring the globe for cheap labor and cheap resources. At IKEA the meatballs may be tasty and the designs adorable, but environmental and human rights concerns take a far back seat to profit.
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