Ikea cuts prices as customers struggle with rising cost of living

Ikea is putting €1.2 billion behind a broad price-cutting drive across Europe, betting that lower prices can bring back customers squeezed by the rising cost of living.

The reductions cover hundreds of products, including the Billy bookcase and Kallax storage units. Some prices will fall by as much as 28%. Ikea said it can fund the move through savings across its supply chain, including lower packaging costs, although profits could suffer.

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It’s about making IKEA more affordable when people need it most, even if it means accepting a lower margin.

Revenue has declined over the past two years as households have had less money to spend on furniture and home improvements. The company has already cut prices several times, contributing to lower revenue and profit in its latest earnings report.

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The cost of living is increasing and it’s getting tougher and tougher for many people.

Ingka, the franchisee that operates most Ikea stores in Europe, said the move was not a short-term promotion. “It’s about making IKEA more affordable when people need it most, even if it means accepting a lower margin,” chief executive Juvencio Maeztu said.

Maeztu added that for some customers, home means a bedroom in a shared house, making storage and organisation especially important. “The cost of living is increasing and it’s getting tougher and tougher for many people,” he said.

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For many people, home is a bedroom in a shared house, and it’s even more important to offer storage and organised solutions.