IKEA: Annual sales down 5% after price cuts

(Reuters) – IKEA’s annual sales fell 5 percent on Thursday as the Swedish budget furniture giant cut prices to attract more customers and defend its share of a declining market. having nevertheless indicated to expect a resumption of activity next year.

Ingka Group, which owns most of IKEA’s stores globally, reported sales of 39.6 billion euros ($43.31 billion) for its 2024 financial year ending Aug. 31, a decline 5% over one year.

“In all our markets, we have experienced a slowdown in the economy and a slowdown in the furniture industry, almost simultaneously,” commented Jesper Brodin, Managing Director of Ingka Group.

“Honestly, we have never experienced anything like this since 2008,” he stressed.

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After observing a drop in store traffic and sales, IKEA chose to reduce its prices, which led to an increase in the number of visitors and products sold, explained Jesper Brodin.

Ingka said it had invested more than €2.1 billion in price reductions across its markets, with its share of the global furniture market remaining stable at 5.7%.

The number of store visits rose 3.3% to 727 million, below the 7.4% growth seen in 2023, while new openings fell to 41 from 60. Ingka forecasts 58 new locations worldwide for fiscal year 2025.

The share of sales made online increased to reach 28%, compared to 26% in 2023.

IKEA predicts that in 2025, lower interest rates will encourage moving, thereby stimulating the purchase of beds, sofas and bookcases.

(Reporting Helen Reid; French version Noémie Naudin; edited by Augustin Turpin)