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Ikea Launches New Strategy With Price Cuts Across Europe
🇱🇹 Lithuania /Economy & Trade

Ikea Launches New Strategy With Price Cuts Across Europe

From Delfi · () Lithuanian

Translated from Lithuanian and summarized by DistantNews. Read the original for the full story.

At a glance

Newswire From a news agency New plan
  • Ikea plans to reduce prices on more than 1,500 products across Europe by 15% to 25%, committing 1.2 billion euros to the cuts.
  • The furniture retailer is targeting consumers constrained by rising living and housing costs after two consecutive years of declining revenue.
  • The company is also opening smaller stores and cutting production costs through redesign, automation and renewable energy.

Ikea is putting 1.2 billion euros behind a broad European price-cutting campaign as high housing costs limit people’s ability to move and weaken spending on furniture and household goods.

The Swedish retailer said it would reduce prices on more than 1,500 products, mainly in Europe, by between 15% and 25%. It hopes the move will attract financially constrained shoppers and lift sales after two consecutive years of falling revenue.

Living costs are rising and it is becoming increasingly difficult for many people.

— Juvencio MaeztuThe Ingka chief explained the pressure on consumers behind Ikea’s European price reductions.

“Living costs are rising and it is becoming increasingly difficult for many people,” said Juvencio Maeztu, head of Ingka, the retail group that operates Ikea stores in many European countries under the franchise model. “For many people, home is just a bedroom in a shared dwelling, making it even more important to offer storage and space-organization solutions,” he added.

In Germany, Ikea’s largest market by revenue, the company said it had cut prices on more than 1,500 items. The Poang armchair fell from 179 euros to 119 euros. In the United Kingdom, the Kallax shelf dropped from 60 pounds to 49, while the Alex chest of drawers fell from 70 pounds to 55.

For many people, home is just a bedroom in a shared dwelling, making it even more important to offer storage and space-organization solutions.

— Juvencio MaeztuHe linked changing housing conditions to demand for affordable storage products.

Inter Ikea chief Jakub Jankowski said the company was redesigning products from the beginning to optimize costs. Redesigning the Pax wardrobe range cut packaging costs by 70%, he said. Greater automation and the use of renewable energy also helped lower costs.

Europe remains an important production region for Ikea, with Poland, Italy, Lithuania and Germany among its main supply countries. Since the start of the year, Ikea has opened seven smaller European stores, moving away from its traditional model of large outlets outside cities. Franchisees in several markets, including the Baltic states, Turkey, Greece, Cyprus, Bulgaria, Iceland and Spain’s Balearic and Canary Islands, also agreed to cut prices.

We are constantly trying to optimize our cost structure, fundamentally redesigning products from the very beginning.

— Jakub JankowskiThe Inter Ikea chief described the company’s approach to funding lower retail prices.
About this summary

Originally published by Delfi in Lithuanian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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