Copenhagen (AFP) – Ikea, the world’s biggest furniture retailer, saw profits fall in its latest financial year but is counting on price cuts and more stores in city centres to revive growth, its chief executive told AFP on Friday.
“I think we are finding the formula, that Ikea is back to our vision about being affordable for the many people who don’t have money,” Jakub Jankowski, chief executive of the Inter Ikea holding company, said in an interview. “I think it will work… There are more and more people in the world who do not have money,” he said.
In September, the group announced price cuts of up to 28 percent on around 1,500 products in Europe, lowering its prices for the second time in two years. From a financial perspective, “we are ready to grow without having to invest in more infrastructure necessarily, because we already have capacity in production, we have capacity in our distribution units,” Inter Ikea’s chief financial officer, Henrik Elm, said during the interview. “We can continue to invest in lower prices, because we utilise our assets better,” he said.
The two executives said they were optimistic about a return to growth after two lacklustre years. For Ikea’s financial year that ended in August, retail sales fell by 1.8 percent to 43.8 billion euros ($48.9 billion) as a result of price reductions, Inter Ikea said in its annual report, without providing details on sales volumes. Operating profit shrank by 12 percent to 1.5 billion euros due to cost pressures and inflation.
To attract customers, the furniture giant plans to increase its presence in city centres at a time when car travel is becoming less common for environmental and financial reasons. The goal is to increase store visits, which rose to 913 million in the latest fiscal year. According to Jankowski, customers want to go to Ikea every four to six weeks, rather than two or three times a year, to buy more everyday items. The retailer wants to “combine the home furnishing experience in the big stores with also being very close to the people when they need us every day,” Jankowski said. “This will be the winning formula as well.”
Small-format stores also allow Ikea to enter cities where a large store nearby would not be viable, said Elm. Thirty small Ikea stores were opened in the 2025–2026 financial year, compared with the closure of eight large stores, seven of them in China. The Chinese market is facing a slowdown in consumption and growing competition from online retailers.
“We are constantly adapting our footprint,” Jankowski said. “On China, we are deliberately saying, ‘OK, maybe we don’t need such big stores.’ It’s better to adapt to the retail environment as it is in China,” he said. Present in 64 markets, Ikea has 519 stores, including 88 small-format outlets, as well as 265 planning and sales points. Founded in 1943 in southern Sweden by Ingvar Kamprad, the flat-pack furniture giant is not listed on the stock exchange and therefore has no obligation to report its financial data. The group began partially publishing its results in 2010. After cutting 850 jobs in May, Ikea now has 217,000 employees worldwide. cbw/po/js
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