Furniture manufacturer IKEA has decided to cut prices on its products amid a sharp rise in inflation and “weak consumer sentiment”. Inter IKEA Group CEO Jon Abrahamson Ring said several goods will become cheaper, individual items by 20%.
“I think 2023 was the year where we turned the corner on prices and started lowering them again,” Chief Executive Officer Jon Abrahamsson Ring of Inter Ikea Group, the worldwide franchiser for the brand, said in an interview. He added that the company is cutting prices across a range of products, including a 20% cut on the popular book shelf Billy.
The company raised prices for franchisees at the beginning of the year amid a sharp rise in supply chain costs. However, the situation has improved since May as raw material prices and transportation costs are “moving in the right direction,” explained Mr. Ring, whose words were quoted by Bloomberg.
According to the filing, IKEA’s retail sales hit a new record of €47.6 billion ($50.6 billion) in fiscal 2023, up 7.3%. This helped offset “the ongoing challenge of declining sales volumes,” Abrahamson Ring elaborated. But, he said, “competition for consumers’ wallets” is increasing, with “wallets also getting thinner.”
