Ikea Revenue Falls After It Lowered Prices

Last year, Ikea reduced prices on over 2,000 products to offer inflation-weary customers a reprieve. Although this resulted in an increase in orders, revenue declined for the first time in four years as discounts cut into its bottom line.

Ikea’s sales fell 4% to €45.1 billion ($49.3 billion) in the fiscal year 2024, which ran from September 1, 2023 to August 31, 2024, the Swedish business said Thursday.

Ikea Revenue Falls After It Lowered Prices

Ikea, the world’s largest furniture retailer, has stated that it has no regrets about emphasizing “lowering the prices” in a $2 billion discount push across all of its locations worldwide.

In a news release, Jesper Brodin, CEO of Ingka Group, Ikea’s largest franchisee, stated that “inflation and interest rates have impacted people’s wallets, and when times are challenging for people, we want to support in the best possible way.”

“Investing into lowering our prices is our long-term promise and this has been a year where the strength of the Ikea vision, our togetherness, and our entrepreneurship lived up to the test of time,” he tweeted.

Ikea, like its competitors, has gradually raised prices since the Covid-19 high in 2020, as material and transportation costs have risen. Last year, the company’s main discount promotion reduced the price of several of its most popular items, including the Billy bookcase.

Ikea Revenue Falls After It Lowered Prices

Lower prices increased visitors to its stores and website by 21%. Ikea sold 1.2 billion meatballs this year, and a company representative told CNN that it also sold more meals at its cafés.

Ikea has announced that it will provide additional reductions this year, although they will be less.

SOURCE | CNN