IKEA sales fall for second year in aggressive price-cutting push

IKEA’s annual sales fell for a second consecutive year, it reported on Thursday, because the funds furnishings retailer caught to a technique of slicing costs to draw cash-strapped customers and achieve market share in a fiercely aggressive market.

Having hiked costs through the pandemic on account of provide chain disruptions, the world’s greatest furnishings retailer has minimize costs by 10% on common over the previous two years as excessive inflation and weak housing markets worldwide dented customers’ demand for furnishings and homeware.

Global IKEA retail sales in the 2025 monetary year- which ended on August 31- fell 1%, or 0.3% adjusted for forex results, to 44.6 billion euros ($51.9 billion). The whole variety of merchandise bought, nevertheless, was up 3%, with buyer numbers and retailer visits additionally up.

“One of the reasons we could take that decision was the fact that we are not on the stock exchange- we can be very long term together with our franchisees and decide that it’s most important right now to have better prices,” Jon Abrahamsson Ring, CEO of IKEA franchisor Inter IKEA, instructed Reuters. “We do that because we see that people in all our 63 markets, their wallets are thinner right now and we see that consumer confidence for many years has gone down.”

IKEA has not but raised costs in the US regardless of increased tariffs on imports rising its prices, Abrahamsson Ring mentioned. IKEA is attempting to soak up the additional price, he added, although he left the door open to doable future worth will increase. “We have not come to that point yet, but it will maybe eventually come,” he mentioned.

IKEA competes in the US with Wayfair and Walmart, however extra of its furnishings is made in factories in Europe, giving it a slight benefit over retailers counting on imports from China which face the next tariff price.

“The agreement that today exists between the European Union and the US… that at least gives us good predictability and we want that to stay consistent,” mentioned Abrahamsson Ring.

Ingka Group, the largest IKEA franchisee which owns shops in 31 markets, additionally reported on Thursday its lowest annual sales since 2021, down 1.6% at 39 billion euros on account of worth cuts, however mentioned portions bought have been up 1.6%.

Ingka CEO Jesper Brodin instructed Reuters he was cautiously optimistic about shopper spending choosing up once more. “The impact of falling inflation and falling interest rates… it usually takes a while before people open their wallets. We are starting to see the tendencies towards that,” he mentioned, including that uncertainty over commerce and battle around the globe made it tough to foretell.