// Ikea global sales jumped 5.6% to €39.5 billion in its 2022 financial year
// The retailer’s affordable offer helped attract shoppers and Ikea is currrently lowering prices
Ikea’s global sales increased 5.6% to €39.5 billion in its 2022 financial year and the UK was one of its top growth markets, as shoppers gravitated towards money-saving products.
Tolga Öncü, retail operations manager at Ingka Group, which operates Ikea, told Retail Gazette that shoppers have been snapping up products that help them reduce their energy consumption amid soaring electricity and gas costs.
He said: “With the circumstances the world is in, shoppers are looking for solutions that can reduce their energy consumption, water consumption, and food waste.
“Our customers are shopping smarter and looking for more affordable and more sustainable solutions by consuming less energy.”
Lowering prices
Ikea’s sales growth comes despite surging inflation, which has cut discretionary spend. However, growth has been stimulated by the retailer’s efforts to keep its products affordable.
Ingka Group CEO Jesper Brodin said: “Being affordable is in our DNA and the key focus of our business – it has never been as important as now when we see an increasing cost of living.
“Our primary aim remains ensuring that the Ikea offer always brings added value to our customers. We have always been there for the many people and through our dedication and hard work, we will continue to side with the many.”
Öncü said that its efforts to up availability and improve supply over the second half had led to cost savings that it has invested into lowering prices and “create even more affordable offers”.
He said: “Ikea is all about offering as low prices as possible so as many people as possible can afford to buy our products. When it’s possible, we look to decrease our prices to make them more affordable.
“Since September we have seen the opportunity to do so in some of our markets and the response is immediate and very good from consumers.”
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UK plans
The UK was one of Ikea’s “top growing countries”, according to Öncü. He said: “The UK is at the forefront of the Ikea world when it comes to omnichannel transformation.”
He said the UK was spearheading initiatives to improve fulfilment capabilities and introduce automation into its operations.
The retailer had also focused on investing in its UK stores, with its inner-city Hammersmith store opening during the year.
Hammersmith is among a throng of city stores that Ikea has been rolling out, which Öncü said were performing above expectations.
As part of its €3 billion investment over the next year, the retailer has vowed to open further city centre locations as it tries to become more accessible to shoppers.
One new city centre store that is on the horizon is Ikea’s Oxford Street flagship, which will open next autumn at the site of the former Topshop store.
Öncü promised the store would offer “the best and latest version of Ikea”, including new digital tools and other “surprising elements”.
The retailer is also trying to “connect more to the local community” and is collaborating with London-based artists and influencers to “make the Oxford Street shop as relevant as possible for Londoners and also the thousands of tourists”.
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