Inter Ikea has reported a profit rise for 2024 amidst a sales decline caused by strategic price cuts.
- The company’s operating profit rose by 4%, reaching £1.9 billion, despite a 9% drop in sales.
- Deliberate price reductions were implemented to enhance affordability after previous price hikes.
- Inter Ikea lowered product prices by an average of 15% over the year.
- Future pricing strategies remain unconfirmed, though further reductions are planned.
Inter Ikea has demonstrated resilience by reporting an increase in profits for the fiscal year 2024, despite a notable drop in sales. Operating profit for the company grew by 4%, rising from £1.8 billion to £1.9 billion. This was achieved even as sales figures fell by 9%, totaling £21.9 billion for the year, according to reports by Reuters.
This unexpected financial outcome was largely driven by Inter Ikea’s proactive strategy to reduce product prices. The company opted for an average reduction across its product range by 15%, allowing the affiliated retailers to decrease prices by an average of 10%.
Inter Ikea’s Chief Financial Officer, Henrik Elm, conveyed that this approach is rooted in the company’s commitment to increase affordability for consumers. This decision follows the necessity to increase prices back in 2021, a response to the surge in raw material costs at that time.
While the initiative has been successful in bolstering profit margins, Elm has confirmed that Inter Ikea intends to continue reducing prices further this year. However, precise details regarding the extent or specific timing of these reductions remain undisclosed.
Inter Ikea’s strategic pricing adjustments have led to profit growth, showcasing their ability to adapt in a challenging market.
