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Global issues impact IKEA US

Article from: 
US
Thu, 21/03/2013 - 22:10
By: 
Ted Marzilli
IKEA meatballs

The meatballs couldn’t be returning to IKEA fast enough.

The home furnishings chain has reached its lowest U.S. consumer perception levels in more than three years after a series of crises, the latest being a horsemeat scare that has effected several food retailers across Europe.

First at the end of September 2012, reports surfaced that women were digitally edited out of the Saudi Arabia catalogue using Photoshop. IKEA apologized immediately, explaining the images were removed “out of deference to the sensitivities of the strict Muslim kingdom.”

In mid-November, Ernst & Young released a report commissioned by IKEA that the retailer contracted with communist East German suppliers that used forced labor to manufacture the firm's products 25 to 30 years ago.

Finally, IKEA recalled its meatballs from its markets and cafeterias at the end of February after discovering a European batch had contained traces of horsemeat.

This week, IKEA announced it famous Swedish meatballs were returning, with new supply chain controls in place.

IKEA was measured with YouGov BrandIndex’s Buzz score, which asks respondents: “If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?”

YouGov BrandIndex measurement scores range from 100 to -100 and are compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback.

IKEA had reached its best Buzz score in 34 months on September 24th, 2012, with a 25. From there, it has been tough going, with each crisis seeming to drive consumer perception more negative.

By the end of October, the Buzz score had dropped to 20, likely on the heels of the Saudi Arabia catalog controversy. On January 6th, the Buzz score was down to 11. IKEA began to recover over the next several weeks, making it back up to 14. Then the meatballs episode broke out on February 25th, sending the score down to its current 4.

Before these three crises, the lowest Buzz score IKEA had since January 2010 was 11 in January 2011.

Buzz: IKEA
Buzz: IKEA
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