Inter Ikea has reported a 4% increase in profit for 2024 despite a notable decline in sales.
- The company’s operating profit rose from £1.8bn to £1.9bn over the year ending 31 August.
- Total sales for the same period decreased by 9%, down to £21.9bn.
- Inter Ikea reduced its prices by an average of 15% to boost affordability.
- The CFO, Henrik Elm, confirmed plans for further price cuts.
Inter Ikea, the parent company behind the Swedish furniture giant, has recorded a 4% rise in operating profit for the fiscal year ending in August 2024. The profit ascended from £1.8bn (€2.2bn) to £1.9bn (€2.3bn), as reported by sources familiar with the matter.
Despite this profit increase, the company experienced a 9% drop in sales, which totalled £21.9bn (€26.5bn). This decline is attributed mainly to strategic price reductions across various product lines.
Inter Ikea’s Chief Financial Officer, Henrik Elm, articulated that the company cut its prices by 15% on average throughout the year. This move enabled retailers to pass on a 10% price reduction to customers, a strategy designed to enhance the brand’s affordability.
This pricing strategy follows previous hikes in 2021 due to rising raw material costs. By lowering prices, Inter Ikea aims to remain competitive in a challenging economic environment.
Henrik Elm expressed intentions to continue with price cuts, although specific targets have not been disclosed yet. The ongoing focus remains on balancing affordability while maintaining profitability.
Inter Ikea continues to prioritise affordability while successfully increasing profits amidst falling sales.
