By John Ensor •
Published: 01 Feb 2024 • 16:12
Stock image of IKEA store.
Who doesn’t love a bargain? Ikea’s latest announcement is set to delight customers across Spain with substantial price reductions.
Recently the renowned Swedish furniture giant declared impressive profit margins and as a result have announced a significant cut on over 900 items in its extensive catalogue.
This move follows a prior reduction affecting 350 products, highlighting the company’s ongoing commitment to affordability.
The reductions are being phased in, offering discounts of up to 50 per cent. Notably, around 100 items are seeing price drops of 30 per cent, including ranges for children, and other popular living room items.
This strategy marks a significant shift, with nearly 1,300 items discounted during the 2024 fiscal year. Among the reduced pieces are many of the company’s best sellers. Nurettin Acar, Ikea Spain’s CEO and security director, stated, ‘they have worked to reduce costs and be more efficient.’
Ikea’s approach to slashing prices involves more than just discounts. The company has invested in technology and staff training, revamped stores, and opened new locations to enhance consumer accessibility.
These steps have improved process efficiency, enabling cost savings that are passed on to customers. Additionally, Ikea plans to lower the costs of delivery, collection services, and financing options, further easing the financial burden on its customers.
The UK has seen substantial profit margins, in the 52 weeks leading up to 31 August, the company’s operational profit surged from £49.6m to £111.2m, a testament to its focus on cost-efficiency and strategic investments in both its physical and digital retail spaces.
Sales saw an 11.9 per cent increase to £2.46bn, with online transactions rising by 19 per cent. The introduction of click-and-collect services, which expanded by 48 per cent, played a significant role, thanks to innovative partnerships with Shift lockers and Tesco.
These collaborations facilitated the setup of mobile collection points in the supermarket chain’s parking areas.
According to the Retail Gazette, IKEA UK are following the same strategy. Peter Jelkeby, CEO and Chief Sustainability Officer for Ikea UK and Ireland, reflected on the company’s achievements: ‘FY23 was a year in which we improved our customer experience, grew our market share and continued making meaningful investments in our business and people.’
‘Having overcome challenges posed by Brexit and Covid, we have since focused on a creating a more efficient organisation and improving our profitability, which gives us the financial strength to continue investing for generations to come.’
The retailer’s BuyBack & Re-sell initiative has also seen substantial growth, with 52,380 pieces of furniture being traded and sold in the last year—an increase of 187 per cent from the previous year. This scheme highlights Ikea’s commitment to sustainability and customer engagement.
Jelkeby also hinted at future plans to further enhance value for customers, stating, ‘we have started the new year by lowering a significant volume of prices, with more to come.’
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Originally from Doncaster, Yorkshire, John now lives in Galicia, Northern Spain with his wife Nina.
He is passionate about news, music, cycling and animals.
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