Swedish company Ikea, the world’s largest furniture company, has reported steady growth in sales. Ikea’s sales for the past 12 months rose 3.6% last year, boosting revenues to £23.2bn. Full year revenues grew at almost double the rate as global demand for Ikea’s products continue to increase. Some 1.5 billion people visited Ikea.com this year, while 716 million people shopped in store.
This growth is in part due to the increase of Chinese shoppers, who are helping to drive up sales as they embrace flat pack furniture and Scandinavian designs. The stores cater to the country’s growing middle class, which is constantly increasing due to the country’s ongoing prosperity in industry and increasingly liberal attitudes on wealth accumulation. The mass migration of Chinese into cities, which is creating a market for modern furniture as affluent city dwellers with money to spend seek to equip their new residences.
China is currently home to 8 of Ikea’s 10 largest stores, where one of the latest trends is shoppers being welcomed to take a nap on Ikea’s beds. It seems that going to Ikea is not just a day dedicated to homeware shopping, but also an all night affair too. The stores are designed with extra room displays and shops even put up signs inviting customers to try them out.
Ikea owns and operates 350 stores in 43 countries, and was founded by Ingrav Kamprad in 1943. It began largely as a mail-order business and began to sell furniture five years later. It now designs and sells ready-to-assemble furniture including beds, chairs and desks. The company is one of the largest users of wood in the retail sector, using approximately 1 per cent of the Earth’s wood supply. “We continue to see positive signs in consumer spending and it’s a great joy to report growth in almost all our markets, not least in the challenging markets in southern Europe,” said Ikea’s chief executive, Peter Agnefjäll.
In Europe, sales also improved as they account for 70 per cent of Ikea’s turnover, however the company said that “the challenging situation may not be over”, with Eurozone economic growth flat and deflationary pressures looming. Business has also improved in North America where the economic climate has improved. The demand for Ikea’s products continues to grow as the Swedish giant plans to open stores in India and boost its online presence in existing markets. Another part of its mission is to hit annual sales of €50 billion by 2020.