Inter Ikea sales decline as price cuts weigh on growth recovery efforts

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Ikea sales decline impacts

Highlights

Inter Ikea's retail sales fell 2 per cent to €43.8bn, with net profit dropping 7 per cent to €1.4bn for the year to August, due to weakness in China and the Middle East.
Over 1,000 product prices were cut in a €1.2bn investment, reducing prices by 15-25 per cent in more than 20 European countries and hurting short-term revenue and profitability.
Ikea opened about 90 smaller stores last year and aims to increase that by 50 per cent for 2026-27, shifting focus to city-centre locations as consumer habits evolve.

Price strategy and annual performance

As reported by the Financial Times, Inter Ikea says retail sales from its 519 stores worldwide fall 2 per cent to €43.8bn in the year to the end of August, as weakness in China and the Middle East outweighs growth in Europe and Latin America.

Inter Ikea, which owns the brand and retail concept, also says its own revenue falls 2 per cent to €25.9bn, while net profit drops 7 per cent to €1.4bn. Chief executive Jakub Jankowski says the market remains difficult and warns the current year could also be challenging.

The company cuts prices on more than 1,000 products in a €1.2bn investment launched in September to support demand. Jankowski says reductions of 15-25 per cent on products including Billy bookcases and Kallax storage units in more than 20 European countries are part of a longer affordability push rather than a one-year measure.

Ikea's business remains volatile since the Covid-19 pandemic, with supply chain disruption and weaker consumer spending affecting its flat-pack furniture operations. After higher shipping costs pushed prices up during the pandemic, Ikea lowered its average selling price in 2023, a move that initially hurts revenue and halves profitability.

Store expansion and changing customer access

Inter Ikea says its ownership structure, built around charitable foundations in the Netherlands and Liechtenstein, allows the group to look beyond short-term market swings and invest heavily when needed. That approach is supporting a broader effort to make the chain more accessible as consumer habits shift.

The retailer opens about 90 smaller stores in its last financial year, and Jankowski says he hopes the figure for 2026-27 will be 50 per cent higher. He says more customers do not have a car or a driving licence, making traditional out-of-town warehouse stores less attractive and pushing Ikea to add more city-centre locations.

Jankowski also says Ikea needs to improve the seasonality and relevance of its range because shoppers in city-centre outlets tend to visit more frequently and expect fresher product offerings. Ingka, the separate arm that operates about 90 per cent of Ikea stores, is due to report results later this month.

Our previous coverage of Mario Draghi’s warning on restrictive monetary policy highlighted the risk that keeping interest rates above growth for too long can worsen debt dynamics and undermine the investment needed for long-term resilience. The article also noted Draghi’s call for central banks to control inflation while avoiding unnecessarily high rate paths, alongside complementary EU measures to support productivity-boosting investment.

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