IKEA is reducing prices on items worldwide.
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Swedish home and furniture company IKEA has cut prices in a number of countries as global inflation declines, as it boosts its investments in lowering prices.
The company is expanding price cuts in 2024 in all its markets globally, with the aim of limiting the price increases introduced in 2022. The move comes with a decline in the cost of transportation and raw materials.
“We do this in all the markets we operate in,” Tolga Onjo, head of retail at Inkga Group, the largest owner of Ikea stores, told CNBC on Monday.
“This is a good time for companies like IKEA to invest in pricing rather than profitability,” he said, adding that many people now have “thinner wallets.” The price cuts, which began in Europe in September, led to an increase in the number of customers, as well as an increase in the items sold by the retailer, according to Onco.
Between September and November, Ingka invested more than 1 billion euros ($1.1 billion) in price cuts in the markets where it operates, according to Reuters.
In Canada, the price of the popular Billy bookstore has fallen by 20% since the company invested 55 million euros to reduce the prices of more than 1,500 products, Ingka said in January.
The commitment to continue lowering prices comes several months after the Swedish retailer warned of delays, following a major disruption in commercial shipping in the Red Sea.
Shipments worth billions of dollars have been diverted due to safety concerns surrounding a wave of Houthi attacks since December 2023.
Despite facing geopolitical risks in the Red Sea, “we are more and better equipped than we have ever been, so we will stick to our promise to continue to lower prices in all the countries we operate in,” Onko told CNBC’s Squawk Box. Asia.
“At IKEA, it's all about serving the many,” he said. “The dreams and desires of many people for a better home have not changed due to the challenges of economic touch, so I am happy that we can contribute to making more sustainable and affordable products available to many people.”
Ingka Group also plans to grow its shopping mall portfolio by connecting its malls with Ikea stores. The holding company is looking to turn IKEA stores into destinations by incorporating co-working spaces, restaurants and more, according to the Wall Street Journal.
