According to Ikea Ireland, a series of wide-reaching price cuts resulted in a sales value drop of 2.4 per cent in the year leading up to the end of August, mirroring a decrease in revenue across its broader operations. Ingka Group, the principal franchisee in the Ikea framework, accounting for 90 per cent of all sales, reported on Thursday a revenue decrease of 5.3 per cent to €45 billion in its most recent financial year. This represents the first yearly revenue drop since 2020.
It was mentioned by the group that more goods were sold but at an average price that was 10 per cent less than it was in 2023. Ikea Ireland, an entity of the Dutch-based Ingka Group, stated that this year, they invested over €10 million in decreasing prices on a selection of their top-selling items. This contributed to a 2.4 per cent drop in the value of the Irish sales year ending August, bringing the total to €246 million.
The company announced that nearly 3,000 products were marked down, providing customers with an “average price reduction of 19 per cent” on these items. As per an Ikea Ireland representative, while sales value decreased, the volumes saw a mild increase as compared to 2023. The company indicated that customer demand improved throughout the year with significant price slashes across kitchen, bedroom and children’s product ranges.
Peter Jelkeby, the CEO of Ikea Ireland and UK, asserted, “Our main priority in the face of economic instability was to stand by our customers. In the wake of a decrease in turnover, our commitment remains to continue dropping prices.” Ikea also noted that it had continued to widen its footprint in the Republic, having opened six “plan and order points” in the last two years across Dublin, Cork, Sligo, Louth, Kildare, and Carlow counties.
Ikea Ireland reported that online sales formed 35.9% of its total sales for the year, an increase from the previous year’s 33%. The growth was largely credited to the opening of its new 26,674-square metre distribution centre at Greenogue Logistics Park in southwest Dublin. In parallel, CEO of Ingka, Jesper Brodin, told The Financial Times that the company had made a significant commitment to affordability in the last year following notable price increments during the coronavirus crisis. Nevertheless, Ingka maintained its market share, despite the shift in consumer patterns due to the pandemic that led to reduced spending on home furniture beginning last year. Ikea’s annual financial data is disclosed in two phases – sales in October and profitability and balance sheet data in the following month. Additional information was provided by The Financial Times.