Ikea is navigating the cost-of-living crisis with strategic price cuts and innovations.
- Operating profits rose by 4% despite a 9% sales drop, thanks to affordability measures.
- The launch of a peer-to-peer marketplace targets the reselling of used Ikea items.
- Ikea’s focus on sleep taps into a growing market with new product expansions.
- Optimism for a better financial outlook remains as strategies unfold.
Ikea has responded to the global cost-of-living crisis by implementing significant price reductions throughout the financial year. This approach has enhanced its value proposition, allowing the company to attract more customers. Despite a 9% decline in sales, Ikea’s operating profits increased by 4%, reaching £1.9 billion (€2.3 billion). This was achieved by focusing on operational improvements, cost reduction in materials, and better product design. Strengthening affordability remains a key theme as consumers continue to be cautious with their spending, though there is hope for improvement in the latter half of the year.
In an innovative move, Ikea has introduced a peer-to-peer marketplace for its Family members, enabling the buying and selling of used furniture. This new platform aligns with the rising trend of reselling Ikea products on platforms like Facebook Marketplace. By offering a marketplace with product data, repair kits, and assembly instructions, Ikea aims to provide a seamless experience for buyers and sellers. The trial in places like Madrid and Oslo has shown promising responses, and further expansion plans are being considered based on these early results.
Sleep is emerging as a major focus for Ikea, highlighted by its recent record-breaking pyjama event. Recognizing the growing consumer interest in quality sleep, Ikea is expanding its product line to include offerings beyond beds and bedding, such as sofa beds and blinds. The focus on sleep essentials covers comfort, air quality, light, sound, and decluttering. Cultural preferences also inform product selections, such as the prevalence of sofa beds in Poland, prompting the introduction of new designs to cater to various needs. Enhancements in store and online aim to improve customer engagement with these sleep solutions.
Ikea’s strategic focus on affordability, resale platforms, and sleep-related products positions it well for a promising future.
