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Ingka Group, which owns the majority of Ikea’s franchise locations, said its annual sales declined 5% in fiscal year 2024, even as price cuts helped boost store traffic and online orders.
The company invested more than $2.0 billion in lowering the prices on thousands of products across its markets, which it said helped drive a 3.3% increase in store visits, a 28% increase in online visits, and a 9% jump in online orders.
“When times are challenging for people, we want to support in the best possible way. Investing into lowering our prices is our long-term promise and this has been a year where the strength of the Ikea vision, our togetherness, and our entrepreneurship lived up to the test of time,” Ingka Group CEO Jesper Brodin said in a statement.
- The Ikea parent company called its price-cutting effort the “New Lower Price” initiative and at the end of last year promised cuts of up to 20% off popular low-cost items.
- Target, Walmart, and a number of other retailers tried this strategy in 2024, as they tried to win back inflation-weary customers and drive volume.
Ingka Group pointed to a number of headwinds behind the sales drop, including economic uncertainties, higher interest rates, and a declining home furnishing market, which it said was down 3.8%.
The company nonetheless remains focused on expansion, opening 43 locations across the world and new “plan and order points” in the US.
“It has never been so important to be as affordable as possible—that’s why we’ve dedicated our energy and resources to lowering our prices,” COO Tolga Öncü said. “At the same time, we kept investing in developing and innovating our retail business, bringing our existing stores to the best shape ever, while securing good value for money and further improvements to our digital solutions and services.”