Ikea bets on price cuts, city stores after profit fall

Ikea is relying on lower prices and more city-centre stores to revive growth after a weaker financial year, Inter Ikea chief executive Jakub Jankowski told AFP.

The furniture retailer said retail sales fell 1.8 percent to 43.8 billion euros in the financial year that ended in August. Operating profit fell 12 percent to 1.5 billion euros, which Inter Ikea attributed to cost pressures and inflation.

In September, Ikea announced price cuts of up to 28 percent on about 1,500 products in Europe, its second price reduction in two years. Jankowski said Ikea was returning to its focus on affordability for people with less money.

Inter Ikea chief financial officer Henrik Elm said the group had enough production and distribution capacity to grow without major new infrastructure investment, allowing it to keep investing in lower prices.

Ikea also plans to expand its presence in city centres as it tries to increase visits. Store visits rose to 913 million in the latest financial year. The company opened 30 small-format stores in 2025-2026 and closed eight large stores, seven of them in China.

Ikea is present in 64 markets and has 519 stores, including 88 small-format outlets, as well as 265 planning and sales points. It now has 217,000 employees worldwide after cutting 850 jobs in May.