IKEA’s annual sales fell 5 per cent after the company cut prices in a bid to attract more customers and maintain its share of the shrinking home furnishings market, according to Reuters.
Ingka Group, which owns most of IKEA’s shops worldwide, reported sales of €39.6 billion ($43.3 billion) for the fiscal year ended 31 August, CEO Jesper Brodin said.
In all our markets we experienced a slowdown of the economy and a slowdown of the home furnishing industry, almost simultaneously. We never experienced anything like that since 2008, to be honest.
Brodin stated that after seeing a decline in shop visits and sales, IKEA decided to lower prices, which increased footfall and the number of products sold, Brodin reported. However, IKEA benefited from households bargaining cheaper as the slowdown in the global property market undermined confidence, according to Tolga Oncu, retail manager at Ingka Group.
IKEA expects sales to rise in 2025 as lower interest rates force more people to move, which usually leads to buying beds, sofas and bookshelves. Oncu anticipates people will spend more time at home rather than going out this holiday season as budgets continue to be constrained by inflation.
Inter IKEA Group, which owns the IKEA brand and makes goods, reported annual sales of €45.1 billion ($49.3 billion) across all franchisees. That figure was down 5.3 per cent from 2023, mainly due to lower prices for raw materials such as wood.
Inter IKEA CEO Jon Abrahamsson Ring said another price cut was planned for the 2025 financial year, which began on 1 September.
