Ikea’s focus last year was helping customers struggling with a high cost of living—even if that hurt its revenue. It invested €2.1 billion to achieve this, coupled with several rounds of price cuts worldwide.
Ingka Group, Ikea’s parent company, reported a 5% drop in the retailer’s sales to €39.6 billion for the 12 months ending August 31, 2024—the first drop since the pandemic.
While that might initially seem alarming, the Swedish home furnishings giant insists it’s exactly what it hoped to achieve.
Ikea said it lured more shoppers into its stores than the previous year, with in-person and online store visitations up 3% and 28%, respectively. During the same period, it also opened 43 new stores.
This year, Ikea grew its market share back to where it was before the pandemic. As economic pressures ease amid cooling inflation and lower interest rates, customers will find themselves flocking to Ikea stores even more, Tolga Öncü, Ingka Group’s retail manager (COO), told Fortune.
“People are starting to sell more, buy more, and when the economy turns, we believe that Ikea will be in a much stronger position than we were before,” he said.
Ikea previously told Fortune that one of the main reasons it has been able to prioritize customer needs over immediate financial gains is because it is privately owned. That’s allowed it to make costly decisions that few others have made as quickly, including hiking wages and subsidizing childcare to address a high workforce turnover in some of its markets.
Ikea’s plan for 2025
As Ikea ushers in a new year, having won over cash-strapped customers, its focus is to increase the number of customers who choose the company for anything related to home furnishings.
It recently launched its secondhand marketplace in Madrid and Oslo and plans to roll it out to many more markets in the coming months. Öncü said there was a “high demand” for an eBay-style platform from other markets since it launched its pilot, which is set to end in December.
“The big advantage, of course, is if we have it on our own platform, we can also support customers … and make it much easier for consumers to exchange their Ikea furniture and products with each other,” he said.
Another measure points to Ikea’s ability to draw people in—the sales of its much-loved meatballs and plant balls have increased over time, with 1.2 billion sold the past fiscal year, as more shoppers visit its restaurants.
Ikea offers discounts for its members on selected days of the week, which have also been “very, very successful” in driving footfall at its stores.
“We do operate one of the world’s biggest restaurant chains, even though we are actually a home furnishing retailer,” Öncü said.
Ikea recently launched a new store in downtown Paris and has a megastore in the works on London’s Oxford Street. These locations, parked in the middle of bustling city centers, will help cater to crowds that care about finding an Ikea nearby rather than traveling to the suburbs to shop.
Ikea plans to release its full financial results in late November.
