Ikea is prioritising affordability and innovation for the upcoming year.
- Despite a fall in sales, operating profits have increased due to strategic price cuts.
- The company has introduced a peer-to-peer marketplace, initially in Madrid and Oslo.
- Ikea is focusing on enhancing sleep-related product offerings.
- Optimism remains for improved financial outcomes in the latter half of the year.
Operating profits for Inter Ikea rose by 4% from £1.8bn to £1.9bn, even as sales fell by 9%. This performance was achieved by implementing significant price reductions to boost affordability during the cost-of-living crisis, according to global retail boss Tolga Öncü. He expressed pride in the efforts to enhance Ikea’s value proposition, which has successfully attracted more consumers to the stores.
One of Ikea’s latest innovations is the launch of a peer-to-peer marketplace. This platform allows Ikea Family members to trade used furniture and is currently being tested in Spain and Norway. Öncü highlighted the advantage of integrating Ikea’s data to enrich product listings, offering resources such as repair kits and assembly instructions, which are uniquely available from Ikea. He reported a positive early response and aims for a potential wider roll-out by the year’s end.
Recognising the importance of sleep, Ikea plans to expand its range of sleep-related products dramatically. This strategic focus includes not only traditional bedding but also sofa beds and other accessories that ensure a quality sleep environment. Emphasising cultural nuances in sleeping habits, Ikea is introducing new sofa beds tailored to various preferences and lifestyles. The strategy also features advancements in store departments and online platforms to better support these offerings.
Öncü observed that while economic conditions remain challenging, he anticipates gradual improvement starting in the early months of the coming year. He remains hopeful that consumers will begin to experience economic relief, facilitating better purchasing conditions. Despite current financial strains, the strategic initiatives set in motion are expected to yield positive results in the near future.
Ikea continues to adapt and innovate to maintain consumer engagement and navigate economic challenges.
