Ikea has announced a significant pricing strategy shift in Europe, committing €1.2bn (£1bn) to reduce the cost of hundreds of products. The move aims to support shoppers impacted by the rising cost of living, a factor that has contributed to a decline in the company's revenue over the past two years.
The price adjustments, which reach up to 28% on specific items, include popular products such as the Billy bookcase and Kallax storage units. In the UK, for example, the price of the Billy bookcase has been reduced to £25, while the Kallax unit is now priced at £49. According to the company, these reductions are supported by supply chain efficiencies, though management anticipates a potential impact on profit margins.
Juvencio Maeztu, deputy chief executive of Ingka Group—the primary franchisee for Ikea stores—emphasized that this is a long-term commitment rather than a temporary promotion. "It's about making IKEA more affordable when people need it most, even if it means accepting a lower margin," Maeztu stated, noting the increasing financial difficulty faced by many households.
Beyond price cuts, the retailer is expanding its physical footprint by opening smaller stores in urban centers, including locations on London's Oxford Street and in Brighton. The company also recently introduced a digital second-hand marketplace to compete with existing platforms like eBay and Facebook Marketplace.
These initiatives arrive as consumer confidence in Europe remains near three-year lows due to persistent inflation. While Ikea continues to operate over 500 stores globally, the brand has faced scrutiny from environmental groups regarding the sustainability of its business model and packaging practices.
Source: BBC News
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