Amid economic pressures and reduced consumer spending, IKEA, under the stewardship of Ingka Group, has initiated multiple rounds of price cuts since the start of the fiscal year in September. Guided by its mission to enhance home living affordably, IKEA has responded to the challenging economic landscape by lowering prices, with the intent to support consumers' purchasing power. Tolga Öncu, Ingka Retail Manager, stated, "This fiscal year for us is the year of lowering prices long-term and becoming even more affordable for our customers. It is not about optimizing profits."
The strategy has resulted in increased sales volumes and a closer alignment with consumer needs during tough economic times. Over 30 markets where IKEA operates are benefiting from these price reductions, which are fueled by savings in the supply chain and operational efficiencies. "Our goal remains to bring our prices as close as possible to their pre-pandemic levels," Öncu added.
Specific impacts of the price cuts include a Euro 80 million investment in Canada, reducing prices for over 1,500 products including popular items like the KALLAX bookshelf and MALM bedframe. In South Korea, prices for nearly 700 products will be reduced by an average of 13% starting May 1, with some items seeing reductions as high as 30%. France has also seen significant reductions, with over 150 products now priced lower, contributing to a total fiscal year investment of Euro 200 million in that market.
IKEA's focus extends beyond simple cost-cutting; the retailer is keen on providing value through products that offer both economic and environmental benefits, such as energy-saving LED bulbs and water-efficient faucets. This approach is part of IKEA's broader commitment to sustainability and affordability, which Öncu believes will help the company increase its market share and remain relevant to consumers facing economic hardships.
