Ikea Pushes Affordability as Inflation Looms

Home furnishings company Ikea said retail sales have picked up over the past year as the world has reopened, but inflation has led to higher prices and supply chain issues have made it difficult to put products on the shelves.

Total Ikea retail sales rose 6.5% year over year during the year ended Aug. 31, the company reported in a Thursday (Oct. 13) press release.

“This year’s challenges continue to give us perspective into people’s life at home, our business and our priorities,” Inter Ikea Group CEO Jon Abrahamsson Ring said in the release. “Homes now fulfill more functions and solve more problems than ever before. That means people need home furnishings and solutions at an affordable price.”

Noting that sales in terms of money increased — due to rising costs and higher prices — but sales in terms of quantities of product have not kept pace with that growth, Ikea said in the release that it aims to deliver affordability.

“Unfortunately, we can’t ignore surging raw material and transport costs,” Abrahamsson Ring said. “Long-term, we remain committed to affordability for the many people around the world.”

Ikea has also continued to expand to new markets. During the last year, the company opened its first stores in Chile, Estonia, Oman, the Philippines and Puerto Rico. It plans to expand to Colombia and Peru in the coming years. At the same time, the company is scaling down its presence in Russia in response to the war in Ukraine, according to the release.

As PYMNTS reported in September, Ikea is also embarking on a $3 billion store refresh program and has expanded the perks of its free loyalty club in the United States.

Read more: Ikea Looks to Drive in-Store Traffic With 5% Loyalty Discount

These moves come even as Ikea is more than holding its own in the struggling furniture segment. In financial year 2021, the company took in over three times the sales of rival company Wayfair.

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