Ikea UK sales have jumped 11.9% to £2.46bn in its 2023 financial year, boosted by more customers shopping for the home amid the ongoing cost-of-living crisis.
Tolga Öncü, retail manager at Ikea operator Ingka Group told Retail Gazette that shoppers were purchasing more practical homeware products.
“Storage across the home has been really a high performing category as well as our bedroom, children’s, cooking and eating ranges.”
Sales of its Pax and Komplement wardrobe systems rocketed 49% and 39% respectively, with sales of the modular Bestå storage system growing by 25%.
Öncü said the amount of times people engaged with their home spaces had “increased dramatically” over the last two years.
“The more you use your [home], the more you see what works and unfortunately, you also see what doesn’t function properly.”
This was reflected in more shoppers flocking to its stores during the year for home inspiration, with UK locations welcoming 1m new victors – an uplift of 2.2%.
Price decreases to continue
Ikea’s sales growth come as consumers continue to remain cautious amid persistently high inflation. The retailer posted a 5.7% increase in global sales to €41.7bn for the year.
The Swedish furniture giant started lowering prices across its main product lines – which include Billie bookcases, Kallax units and Pax wardrobes – back in 2021 to support customers. This is set to continue, Öncü said.
He said: “One of the most important thing for us is to be as affordable as possible so any cost saving that we do, we always try to pass that on to the customer.”
“One of the biggest priorities we have this year is focusing on storage across the home as these are the areas where most people say they have the biggest struggle. It’s where we are investing the most in lowering the prices.”
Öncü said it was also lowering the prices of its delivery options: “We have seen great development in decreasing the last mile cost for Ikea thereby also reducing the prices for the customers as well.”
The Swedish giant has a collaboration with Tesco providing ‘Collect Near You’ points for customers with more convenient, accessible, and affordable collection services across the UK.
“We have also introduced to one person delivery and curbside delivery, which is operated at a lower cost and thereby at a lower price for the customer,” he added.
More shoppers made use of the retailer’s strengthened delivery offer, with 38.5% of total UK sales made online.
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Ikea Oxford Street
As part of its €4.5bn (£3.8bn) investment into key markets over the next year, Ikea is gearing up to unveil its highly anticipated store in the centre of London’s busiest shopping district.
“Oxford Street is one of the biggest projects that we are working on at the moment,” Öncü said.
The retailer was forced to push back its autumn 2023 opening by a year, citing that it needed to “ensure optimal preservation” of the grade II listed building that housed the former Topshop flagship.
Öncü promised the flagship would offer features “that we have never tried in Ikea before”.
He said: “We always try to use these locations to test new things. There will be a different ways to interact with the range and digital components that we haven’t tried in UK before to bring our products and solutions to life rather than the static experience.”
Keen to make a splash with its new store, Öncü said the team were “investing a lot of time with the [locals] to understand what they need from IKEA in the city centre of London”.
He added: “We’re doing some very exciting projects in and around the Ikea food concept as well.”
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