IKEA's Pricing Strategy Amid Economic Slowdown

IKEA's annual sales fell by 5% as the retailer slashed prices to attract more customers amid a shrinking home furniture market. Despite the downturn, IKEA anticipates a recovery in 2025, driven by lower interest rates. The Ingka Group reported sales of 39.6 billion euros with increased online sales.

IKEA's annual sales experienced a 5% decline following a strategy to reduce prices in a bid to draw more shoppers to its stores. Amid a shrinking home furniture market, the Swedish retailer anticipates an economic recovery in 2025.

The Ingka Group, owning the majority of IKEA stores worldwide, recorded sales of 39.6 billion euros for the financial year ending August 31. The drop is attributed to economic slowdowns globally, as noted by CEO Jesper Brodin. Despite fewer store visits and a decrease in sold quantities, price cuts sparked a rise in footfall and sales volumes.

Online sales rose, making up 28% of total sales compared to 26% the previous year. Store visits increased by 3.3% to 727 million. Tolga Oncu, Ingka's retail manager, attributed households trading down during the property slowdown to IKEA's steady market share. Planned expansions include 58 new locations by 2025.

(With inputs from agencies.)