Image source, Getty ImagesImage caption, Ikea is trying to win new customers by opening high street stores like this one in London
ByEmer MoreauBusiness reporter- Published13 minutes ago
Swedish furniture giant Ikea is cutting prices across a range of popular products in Europe, including the Billy bookcase and Kallax storage units, to woo cash-strapped customers.
Ikea has seen revenue decline over the past two years as the rising cost of living reduces people's ability to invest in new furniture and home renovations.
The company is spending €1.2bn (£1bn) on the price cuts, which represent reductions of up to 28% on certain products.
Ikea said it could make the cuts by making savings throughout the supply chain, such as packaging costs.
Ingka, the franchisee which operates most of Ikea's European stores, said the cuts were "not an activity or short-term campaign".
"It's about making IKEA more affordable when people need it most, even if it means accepting a lower margin," said Juvencio Maeztu, chief executive of Ingka. "The cost of living is increasing and it's getting tougher and tougher for many people."
He added: "For many people, home is a bedroom in a shared house, and it's even more important to offer storage and organised solutions."
Ikea has reduced its prices several times in recent years, even as it caused a hit to the company's revenue and profit in its most recent earnings report.
Image source, Getty ImagesImage caption, Ikea's popular Billy bookcase is one of the products being cut in price
The latest specific reductions vary slightly by country. Price cuts for British customers include the Kallax shelving unit going from £60 to £49 and the Billy bookcase being cut by £10 to £25.
Ikea is also trying to attract new customers by opening smaller stores in central areas, such as London's Oxford Street and Churchill Square in Brighton.
In 2024 it launched its own second-hand online marketplace in a bid to rival sites like eBay and Facebook Marketplace.
Despite a recent uptick, consumer confidence in Europe is at its lowest level for almost three years due to concerns about inflation and the cost of living, according to EU figures. , external
British consumers, meanwhile, are becoming more optimistic about the economy and their own finances, following a truce in the Middle East, but analysts have warned that inflation and the rising cost of living could dent consumer confidence in the coming months.
Ikea operates over 500 stores worldwide under a franchise system.
Many of its minimalist, self-assembled products have become ubiquitous in homes across Europe.
But it has faced criticism from environmentalists for contributing to a culture of disposable furniture and excess packaging.
Related topics
From lighting to vintage gems: Five ways to spruce up your rental
- Published5 days ago
